Barrick Gold Earnings: Lower on Poor Sales Volumes and Higher Unit Costs

No-moat Barrick Gold’s 2023 second-quarter result was lower than our expectations. Adjusted NPAT of about USD 340 million or USD 0.19 (CAD 0.25) per share was around 20% below the second quarter of 2022 but 36% higher than the previous quarter. Adjusted EBITDA of about USD 1.4 billion fell 10% on last year, driven by lower gold sales and higher unit cash costs, partially offset by higher gold prices. Nevertheless, gold sales improved on the prior quarter, and we think sales likely continue to improve over the remainder of 2023, driven by increased production at Barrick's 61.5%-owned Nevada Gold Mines, or NGM, and 60%-owned Pueblo Viejo joint ventures with Newmont. Increased sales will, in turn, likely lower unit cash costs and improve margins, in our view. However, we think it unlikely that an improved second half will fully make up for lower-than-expected first-half sales and modestly lower forecast 2023 attributable gold sales to about 4.2 million ounces, down from roughly 4.3 million. Our forecast unit cash costs for 2023 rise accordingly, to about USD 890 per ounce, up from USD 870 previously.