(Adds production, cost forecasts, byline)
By Susan Taylor
TORONTO Feb 15 Barrick Gold Corp
reported better-than-expected profits and ambitious debt
reduction plans on Wednesday, saying its balance sheet is now
healthy enough to boost dividends and exploration spending.
The Toronto-based miner, which is hiking its dividend to 3
cents from 2 cents a share, said it will expand its hunt for new
gold beyond trusted core districts and projects, to so-called
Such uncharted territory represents a higher risk of
failure, but bigger potential rewards for sizeable discoveries.
Some 80 percent of the $185-$225 million exploration budget is
earmarked for the Americas, with much of the remainder for its
African unit, Acacia.
In 2016, it budgeted $125-$155 million for exploration.
Barrick, the world's biggest gold miner, reported an
adjusted profit of 22 cents a share, ahead of the consensus
analyst estimate of 19 cents per share, and up from 8 cents a
share in the same period last year.
Revenue increased to $2.32 billion from $2.24 billion.
Barrick, which has been selling non-core assets to help cut
debt, plans to further reduce its debt by $2.9 billion by the
end of 2018, decreasing its debt load to $5 billion from $7.9
Cash flow from operations, non-core asset sales and new
joint ventures and partnerships will finance the effort, which
reduced debt by $2 billion in 2016.
Barrick estimates its 2017 all-in sustaining costs, a
measure of the effective day-to-day cost of producing gold, at
$720-$770 an ounce, below an earlier estimate of $740-$775.
The cost of fourth-quarter production was $732 an ounce,
down from $848 in the same period last year. Barrick has been
pushing to improve efficiency and incorporate more technology
into its operations.
Barrick expects to produce 5.6-5.9 million ounces of gold in
2017, up from 5.52 million in 2016, and above its earlier target
of 5-5.5 million ounces.
Production in 2018 is expected to drop to 4.8-5.3 million
ounces, and to 4.6-5.1 million ounces in 2019.
Fourth-quarter gold production declined to 1.52 million
ounces from 1.62 million last year. Full-year copper output was
415 million pounds, with fourth-quarter production of 101
Proven and probable gold reserve estimates fell 6.5 percent,
to 85.9 million ounces at the end of 2016, from 91.9 million
ounces in 2015. Last year, some 1.9 million ounces was divested
and 6.8 million ounces depleted through mining, Barrick said.
(Reporting by Susan Taylor; Editing by Peter Cooney, David
Gregorio and Bernard Orr)