(Reuters) -Barrick Gold Corp on Thursday reported a 30.1% drop in third-quarter profit as the world’s second biggest gold miner contended with weak production and higher costs amid a tight labor market.
The Toronto-based miner said it now expects to exceed its previous gold cost guidance for the year, as all-in sustaining costs (AISC), an industry metric that reflects total expenses, rose to $1,269 per ounce, a 22.7% increase on the September quarter last year.
The cost increase was largely down to a 9% fall in gold production from 1.09 million ounces to 988,000 ounces, CEO Mark Bristow told Reuters in an interview.
“Of course we’ve got cost pressures everywhere,” Bristow said, adding that the worst-affected mines were Carlin and Cortez in Nevada, and Veladero in Argentina.
All-in sustaining costs for copper also rose, to $3.13 per pound from $2.60 per pound. Copper production increased, however, to 123 million pounds from 100 million pounds.
Barrick remains on track to achieve its 2022 production guidance, Bristow said in a statement. The miner however said production at both Turquoise Ridge in Nevada and Hemlo in Canada is expected to be below the 2022 guidance range.
Barrick’s net earnings fell to $241 million, or 14 cents per share, in the quarter ended Sept. 30, from $347 million, or 20 cents per share, a year earlier.
Gold prices declined 8% during the third quarter as global central banks raised interest rates to battle surging inflation. Barrick’s average realised price for gold fell 2.8% to $1,722 per ounce from a year earlier, the company said.
Larger rival Newmont Corp on Tuesday reported a 56% drop in quarterly profit, largely due to lower gold sales volumes and higher labor, energy and raw materials costs.
(Reporting by Arshreet Singh in Bengaluru and Helen Reid in Johannesburg; Editing by Sriraj Kalluvila and Shailesh Kuber, Kirsten Donovan)
