Barrick CEO Bristow on Earnings, Gold and Copper Markets

Barrick CEO Bristow on Earnings, Gold and Copper Markets

So good earnings overall.
And of course, you can see that
reflected in the shares.
There was a hit to gold production,
though, when you take a look at the
quarter past, but reading through your
earnings release, it seems like some of
those production issues that you have
have been resolved.
Morning, Kate.
Yes, You know, we ended up last year
just missing our guidance because we had
a conveyor belt fail and Dominican
Republic mine.
And and so we spent the first quarter of
rebuilding that it’s now built.
And we’ve just recently commissioned
that.
So and we’ve we’ve got a this year the
ramp up on the back of that, you know,
taking that backlog away.
So a good place to be.
Lots of projects on the go.
And as you’ve seen, the gold price is
high and and so, you know, looking
forward to larger margins throughout the
year as we drop the costs and expand our
production.
Yeah, you’re you’re right.
You take a look at gold right now
currently trading near 20 $300 an ounce
as I understand it.
Barrick, I mean, you have several
billion dollars of cash at hand.
Are you looking to make any acquisitions
given how hot the gold market is?
I think
we have an organic portfolio that will
deliver about 30% growth in our
production profile too, through to the
back of this decade.
And so we want to spend some of that on
on capital to deliver on that those
plans.
And then, of course, you know, with a
bigger margin, we’ve got a very clear
return policy as far as share buybacks
and and growing our dividend.
So, you know, that’s that will be part
of that as as part of our capital
allocation strategy.
And I mean, spending a little bit more
time on the price of gold, I mean, it’s
up about 11% or so or so so far in 2024.
How are you thinking about it?
Do you see gold as maybe over bought
here, or do you think that this rally
has more room to run?
I think it’s showing it’s measuring the
complexity of the global economy as well
as the geopolitical situation that we’re
facing across the globe.
And it’s interesting, Katie, that you
see that gold price go up.
The the equity is is lagging.
The equity values are lagging.
We’ve seen the ETFs locking up.
So really my interpretation is that
people are very nervous about paper
currencies at the moment.
And of course, it’s a it’s a year where
most of the major economies are holding
elections and and and people are
propping up their economy.
So I think that’s what you be seeing.
And and on top of that, the geopolitical
situation is very extremely dynamic.
So and gold is a measure of uncertainty
and and and economic risk.
So that’s what I think we’re seeing.
Well, I’m so glad that you brought up
the disconnect between what we’re seeing
in the shares versus what we’re seeing
in the actual metal itself.
Because I take a look at your share
price so far this year, and I think you
have one of the best tickers out there.
Gold for Barrick really gets the point
across, but your shares are down 7% this
year.
Gold is up more than 11%.
You have a similar situation with your
competitors as well.
Why haven’t the gold miners really kept
up and participated in the rally that
we’re seeing in gold itself?
So I don’t really know, but I can hazard
a guess.
So
what I think is happening is that we all
experienced significant inflation
impacts in our costs which which shrunk
the margins.
And so the the the investors relied more
on buying the physical.
But as we’ve got on top of our
businesses and I’m speaking specifically
for for Barrick and we now are at a
point where we growing production again
and of course that drives the costs down
irrespective of the inflation.
So we start growing the margins and
therefore the return.
And once you get returns visible in the
equity, of course, as you know, gold
doesn’t pay interest.
So then you should see rotation out of
the equity, I mean, out of the physical
back into at least part of it, back into
the equity.
And so with this big expansion and in in
margins, I’m absolutely convinced that
you’ll see a bigger interest in the
equity going forward throughout this
year.
And that, of course, would cause the gap
to shrink there.
And it’s I mean, it’s something that we
see with energy companies all the.
Time to with oil.
Appreciate the the color around that.
Let’s talk about copper a little bit.
You talked about your organic portfolio
as it relates to gold.
But it’s interesting, some of your
competitors, I mean, rail, for example,
have said that it’s better to build a
copper mines, Dan, Rather than to buy
one.
And I’m curious where you stand on that
question.
So, absolutely, you know, you know, many
of my peers in the gold industry all
want to be gold miners.
Back in 2019, I was very clear that we
are going to build a copper portfolio
within Barrick to complement its its
Tier one gold assets.
And we’ve done that.
And just to put it in perspective, you
saw
BHP make a bid for Anglo American this
last week.
And just to put it in perspective, our
portfolio that we are now delivering
against by the time we finish the record
expansion will be almost the same size
as the
Anglo American copper portfolio, which
BHP has been bidding for, and that’s a
very valuable portfolio as you’ve seen
in the in the size of the bid.
So we’re excited about our copper part
of our business and we’re definitely on
that delivery path to be able to become
a significant copper producer as we are
gold.
And Mark, I only have about 30 seconds
left with you, but you brought up the
takeover.
And I’m wondering, are there any Anglo
assets that you might be interested in
if that BHP takeover proceeds?
You know, BHP is the ultimate £5,000
gorilla in the mining industry.
It’s it’s it’s a determined company
right now.
We’re very focused on our organic
growth.

Barrick Gold President and CEO Mark Bristow discusses the company’s first-quarter earnings and the outlook for the gold and copper markets with Katie Greifeld on Bloomberg Television. Barrick Gold reported adjusted earnings per share for the first quarter that beat the average analyst estimate.

For more on gold prices, please see: https://www.bloomberg.com/news/articles/2024-05-01/gold-xauusd-holds-fall-as-markets-brace-for-hawkish-tone-at-fed-meeting
——–
More on Bloomberg Television and Markets

Like this video? Subscribe and turn on notifications so you don’t miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9
Visit http://www.bloomberg.com for business news & analysis, up-to-the-minute market data, features, profiles and more.

Connect with Bloomberg Television on:
X: https://twitter.com/BloombergTV
Facebook: https://www.facebook.com/BloombergTelevision
Instagram: https://www.instagram.com/bloombergtv/

Connect with Bloomberg Business on:
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
TikTok: https://www.tiktok.com/@bloombergbusiness?lang=en
Reddit: https://www.reddit.com/r/bloomberg/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/

More from Bloomberg:
Bloomberg Radio: https://twitter.com/BloombergRadio

Bloomberg Surveillance: https://twitter.com/bsurveillance
Bloomberg Politics: https://twitter.com/bpolitics
Bloomberg Originals: https://twitter.com/bbgoriginals

Watch more on YouTube:
Bloomberg Technology: https://www.youtube.com/@BloombergTechnology
Bloomberg Originals: https://www.youtube.com/@business
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake
Bloomberg Espanol: https://www.youtube.com/@bloomberg_espanol
Bloomberg Podcasts: https://www.youtube.com/@BloombergPodcasts