Barrick Gold Corporation (NYSE: GOLD) stock plummeted over 5% in intraday trading Tuesday after the company reported lower preliminary gold and copper output for the first quarter.
Canadian mining company Barrick Gold (GOLD) announced on Tuesday that its production of gold and copper declined sequentially in the first quarter due to lower grades and maintenance activities at its mines.
The company reported a preliminary total output of 940,000 (940K) ounces of gold and 40,000 (40K) tonnes of copper for the three months ending March 31, down from 1.05M ounces of gold and 113M pounds of copper in the previous quarter.
Meanwhile, Barrick (NYSE: GOLD) forecasts that its all-in-sustaining costs (AISC) will increase by 7%-9% compared to the previous quarter. However, it expects gold production to improve over the year, with the Pueblo Viejo gold mine in the Dominican Republic set to ramp up production starting in the second quarter.
Geopolitical Risks in Mali
Apart from production concerns, Barrick faces heightened geopolitical risks in Mali, where it operates the Loulo-Gounkoto mine, one of the world’s largest gold mines. In 2023, this complex, which comprises two distinct mining concessions with substantial gold reserves, produced 683,000 (683K) ounces of gold, and it is on track to meet its production targets for the current year.
According to Africa Report, the complex is at risk of potential seizure by the Malian military junta, which has aligned itself with Russia’s Wagner Group. The junta, formed following a coup in 2021, has been seeking to increase state control over mining companies through industry audits and implementing new mining codes.
Barrick asserts that its operations in Mali are governed by the existing 1991 mining code, rather than the junta’s newly implemented code. CEO Mark Bristow has visited Mali twice since January as part of a comprehensive review of African operations. He highlighted that nearly $10 billion of Barrick’s contributions to Mali’s economy, accounting for 5 to 10 percent of the country’s GDP, are governed by the existing 1991 mining code.
Barrick is not alone in facing uncertainty within the Malian mining sector. The junta’s actions also affect other major mining companies with a presence in the country, such as IAMGold Corporation (NYSE: IAG), B2Gold Corporation (NYSE: BTO), and Hummingbird Resources (HUMRF). These actions raise concerns about the future stability of the mining industry, particularly with the involvement of a Russian paramilitary organization.
The company plans to release its full first-quarter report on May 1, providing further insights into its operational and financial performance.
Barrick Gold (NYSE: GOLD) Stock Reaction
At the time of publication, GOLD stock has dropped 5.12% compared to the previous trading session and is trading at $16.48. The traders have exchanged hands with 49,673,576 (49.67 million) shares versus the average daily trading volume of 23.34 million.
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