Barrick Gold Corporation (ABX) has announced the completion of its joint venture agreement with Saudi Arabian Mining Company (Ma'aden) for operating the Jabal Sayid copper mine in Saudi Arabia, signed in Jul 2014.
Under the agreement, both Barrick and Ma’aden will own 50% of the joint venture. Ma'aden will acquire its 50% interest for cash consideration of $210 million. Once fully operational, the project is expected to produce about 100million pounds of copper in concentrate per year during its first full five years of operation, which could potentially increase to 130 million. The mine is anticipated to operate for up to 15 years on the basis of 1.4 billion pounds of copper in proven and probable reserves as of Dec 31, 2013.
The mine, which is likely to be a low cost one, will produce high quality copper and is expected to start shipping low-cost concentrate in early 2016. It is also anticipated to generate considerable cash flows. Moreover, it will presumably be beneficial to the local community by serving as a means of economic development.
In order to extend the mine life, exploration work will be carried out within the mining license area and the exploration license area surrounding the mine.
Barrick's shares rose as much as around 4.8% in the trading session after the announcement.
Barrick released its third-quarter 2014 results in October. The company’s adjusted earnings (excluding one-time items) for the quarter plummeted to 19 cents per share from 58 cents in the year-ago quarter but beat the Zacks Consensus Estimate of 16 cents per share. Lower pricing and volumes for both gold and copper led to the decline in earnings.
On a reported basis, profit for the third quarter was $125 million or 11 cents per share, down 27.3% from $172 million or 17 cents per share in the prior-year quarter. The results include $51 million in unrealized losses on non-hedge derivative instruments and $42 million in unrealized losses related to foreign currency translation.
Revenues fell around 13% year over year to $2,598 million in the reported quarter and missed the Zacks Consensus Estimate of $2,479 million. Average realized price of gold decreased 2.9% year over year to $1,285 per ounce. All-in costs declined 17.5% to $975 per ounce while all-in sustaining costs fell roughly 8.8% to $834 per ounce in the reported quarter.
Currently, Barrick carries a Zacks Rank #3 (Hold).
Other mining companies with favorable Zacks Rank include Lake Shore Gold Corp. (LSG), Banro Corporation (BAA) and MAG Silver Corp. (MVG). All of these hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment