Gold price set for biggest weekly jump in 13 months on haven demand
The precious metal has surged around 30% so far this year, supported by healthy central bank buying.
Barrick Gold (TSX: ABX) (NYSE: GOLD), the world’s second-largest producer of the precious metal, expects first-quarter gold output to fall by 8.5% as it has had to scale down operations due to measures to stop the spread of covid-19.
The gold giant remains confident that it will make its annual production guidance of between 4.8 million and 5.2 million gold ounces.
Most mining companies have recently been forced to halt or curtail production due to lockdowns and other measures governments worldwide are implementing to fight the coronavirus pandemic.
Unprecedented disruptions to operations and supply chains have thrown the outlook for industrial and precious metals out the window, just as what the IMF warns will be the steepest recession in almost a century begins to hit demand.
“Preliminary figure puts Barrick on course to meet its outlook for the year despite the impact of coronavirus-led lockdowns.”
Chief executive officer Mark Bristow
Barrick is now expecting to churn out 1.25 million ounces of gold in the first three months of the year, slightly below the 1.37 million ounces it produced in the first quarter of 2019.
The Canadian gold senior said in March it would stockpile key commodities to prepare for the possibility that the pandemic could shutter its mines.
In the past year, Barrick has been focusing on its tier-one assets and has reported strong performance across the group, particularly at Cortez mine in Nevada and Veladero in Argentina.
It has also boosted production at Kibali, Congo’s biggest gold mine, which last year beat its production guidance of 750,000 ounces of gold by a substantial margin, delivering a new record of 814,027 ounces.
Porgera in Papua New Guinea has tier one potential, but faces many challenges in the form of “legacy issues and an unruly neighbourhood,” Barrick’s president and chief executive officer, Mark Bristow, said last month.
He noted that the mine had exceeded guidance and the company continued to negotiate a 20-year lease extension with the government.
Bristow, who took the helm in January 2019, said the work done over the past months had equipped Barrick to become the most valued gold company by 2030.
