American Barrick earnings increase 81% in third quarter

Driven by an astute hedging program and lower operating costs at six gold mines, American Barrick Resources (TSE) reported record earnings in both the third quarter and nine months ended Sept. 30.

Third-quarter earnings jumped by 81% to US$28.2 million or 20 US cents per share compared with the identical period last year when Barrick reported earnings of US$15.6 million or 12 US cents per share.

Revenues in the third quarter also rose substantially to US$92.4 million from US$65.4 million in the same period last year.

Barrick President Robert Smith attributed the record performance to costs which dropped in the third quarter to US$279 per oz. from US$339 in the year-earlier period.

In the first nine months of 1991, Barrick reported net earnings of US$68.4 million or 50 US cents a share on revenues of US$255.6 million compared with earnings of US$43.1 million or 33 US cents a share on revenues of US$179.7 million in the same period last year. That represents a 59% increase in profits.

Having produced 595,524 oz. in the same period, compared with 437,562 oz. in the first nine months of 1990, Barrick is on target to produce 700,000 oz. of the yellow metal this year, according to Smith.

Also, Barrick reached an out-of-court settlement with BBN James Capel Inc. relating to a 1989 lawsuit in which Barrick accused the British brokerage house of acting improperly in accumulating shares of Consolidated Gold Fields. The lawsuit alleged that Capel deprived Barrick of the chance to bid for Gold Fields by buying shares for its own account after it was instructed to build a position in Gold Fields by the Canadian company.

Barrick is thought to have received more than $4 million plus costs estimated at $1 million.