Barrick Gold’s ABX adjusted earnings (excluding one-time items) for the first quarter of 2015 plummeted to 5 cents per share from 20 cents per share in the year-ago quarter and also missed the Zacks Consensus Estimate of 10 cents. Lower pricing for both gold and copper along with reduced gold production led to the decline in earnings.

On a reported basis, earnings for the first quarter were $57 million or 5 cents per share compared with $88 million or 8 cents per share in the prior-year quarter. The results include $22 million in gains from asset dispositions, $13 million adjustment related to the use of a lower discount rate to calculate the provision for environmental remediation at its closed mines; and $6 million in currency translation losses.

Revenues fell around 15.2% year over year to $2,245 million in the reported quarter and missed the Zacks Consensus Estimate of $2,260 million. Average realized price of gold decreased 5.1% year over year to $1,219 per ounce. All-in costs increased 9.2% to $1,024 per ounce, and all-in sustaining costs (AISC) rose roughly 10.6% to $927 per ounce in the reported quarter.

Gold production fell to 1.39 million ounces from 1.59 million ounces a year ago. Copper production rose to 118 million pounds from 104 million pounds in the prior-year quarter.

Regional Results

Gold

The Goldstrike mine, in the North American region, produced 207,000 ounces of gold in the quarter, down 21% year over year, at an average all-in sustaining cost of $876 per ounce.

The Cortez mine, produced 133,000 ounces of gold in the quarter, down 41.4% year over year, at an average all-in sustaining cost of $962 per ounce. The first quarter reflected higher grades in both open pit and underground as along with improved productivity.

Production at Pueblo Viejo decreased 15.1% to 135,000 ounces. Production at Lagunas Norte mine rose 32.8% to 178,000 ounces due to higher recoveries. Production at Veladero decreased 5.7% year over year to 149,000 ounces. The Turquoise Ridge produced 49,000 ounces in the quarter, down 9.3% year over year. The Porgera mine produced 118,000 ounces, up 7.3% year over year.

Copper

Copper production in the first quarter was 118 million pounds, up 13.5% year over year. C1 cash cost was $1.84 per pound in the quarter, down from $2.11 per pound in the year-ago quarter.
 
Financial Position

Cash and cash equivalents were $2,258 million as of Mar 31, 2015, down roughly 15.5% from $2,672 million as of Mar 31, 2014. Long-term debt was roughly $12.6 billion, down from around $13 billion a year ago.

New Gold discovery

Barrick made a significant new gold discovery known as Alturas, located in the Andean region of Chile around 30 kilometers south of the former El Indio mine. This region of the Andes has some of the world's largest gold deposits, including Veladero, Pascua-Lama, El Indio and Tambo. Barrick controls almost all of the prospective ground on the 140 kilometer long El Indio belt.

Exploration partnership with Quantum Pacific Exploration

Barrick entered into a strategic partnership with Quantum Pacific Exploration to explore for copper deposits in a number of highly prospective areas of northern Chile. Quantum utilizes innovative strategies and tools to increase the probability of discovery, faster than conventional approaches and at lower costs.

Guidance

Gold production for 2015 is expected to be in the range of 6.2—6.6 million ounces at AISC of $860—$895 per ounce. Production will be about 55% weighted to the second half of the year and costs are expected to be 20% lower in that period. Also, all-in sustaining costs and cash costs are expected to be highest in the second quarter, with full-year all-in sustaining costs in line with guidance of $860—$895 per ounce.

The company increased copper production guidance for 2015 to 480—520 million pounds, with C1 cash costs remaining unchanged at $1.75—$2.00 per pound.

Barrick's five core mines in the Americas are expected to account for 60% percent of its production in 2015 at average all-in sustaining costs of $725—$775 per ounce.

Barrick remains committed to achieve its overall target of $30 million in savings from reduced general and administrative expenditures and overhead costs in 2015, reaching $70 million in annualized savings by 2016.

The company is also focused on reducing debt by at least $3 billion by the end of 2015, with asset sales and other initiatives in progress.
Capital expenditure guidance for 2015 has been reduced by $100 million to $1.8—$2.1 billion.

Value Realization Reviews are underway to identify opportunities to maximize free cash flow, grow production and lower costs across the portfolio.

Currently, Barrick carries a Zacks Rank #3 (Hold).

Better-ranked gold mining companies include Gold Fields Ltd. GFI, Sibanye Gold Limited SBGL and AngloGold Ashanti Ltd. AU. While Gold Fields and Sibanye Gold sport a Zacks Rank#1 (Strong Buy), AngloGold holds a Zacks Rank #2 (Buy).