Barrick Gold profit up 76% on sky-high gold prices

Barrick Gold Corp. reported a 76% jump in adjusted second-quarter earnings and a 20% increase in its dividend on Thursday as it benefited from sky-high gold prices.

Net income excluding one-time items was US$759-million, (or US77¢ cents a share) compared to US$431-million (or US49¢ a share) in the same period a year earlier. And thanks to high prices and lower costs, cash margins rose 58% year-over-year to a staggering US$748 per ounce.

The results beat the consensus analysts estimate of US72¢ a share.

On a conference call, the company said that gold prices were strong enough that it could raise its dividend 20% to US12¢ a share and still have ample cash to invest in its projects. The company also said it plans to move from a semi-annual dividend to a quarterly dividend, a sign that it plans to return more capital to shareholders in the future.

"We have raised the dividend nearly 120% over the last five years," chief executive Aaron Regent pointed out on the call.

Unadjusted earnings in the quarter were up 59% to US$783-million, or 79 cents a share.

Total Sales were up 34% to US$2.6-billion. Gold prices hit a record high of more than US$1,260 an ounce during the quarter as investors sought risk-adverse investments amid the European sovereign debt crisis.

“We had another good quarter with solid operational and financial results. Our operating costs were stable and when combined with the higher realized gold price, led to significant margin expansion, record quarterly earnings and strong cash flow generation,” Mr. Regent said in a statement.

“We continued to advance our project pipeline in line with our plans. In particular, Cortez Hills has been completed and is performing exceptionally well and the construction of Pueblo Viejo and Pascua-Lama continue to move forward. The outlook for the price of gold remains very positive and Barrick will continue to be a major beneficiary."