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Barrick Gold CEO tells shareholders gold benefits from global financial turmoil

TORONTO - Barrick Gold Corp. (TSX:ABX) says higher prices and increased production helped the Canadian-based gold giant achieve record earnings in the first quarter.

TORONTO - Barrick Gold Corp. (TSX:ABX) says higher prices and increased production helped the Canadian-based gold giant achieve record earnings in the first quarter.

The world's biggest gold miner reported Wednesday that its net income more than doubled to US$758 million, or 76 cents per share, beating analyst expectations of 62.3 cents per share, according to estimates compiled by Thomson Reuters.

The results, reported in U.S. dollars, are a significant increase from profits of $371 million, or 42 cents per share, in the same period last year.

Sales also beat analyst expectations, rising to $2.6 billion from $1.8 billion in the year-ago quarter.

Barrick's quarterly results were helped by bullion prices, which have hovered around US$1,100 an ounce so far this year. Barrick's average realized gold price was $1,114 per ounce, an increase of 22 per cent from a year earlier.

Chief executive Aaron Regent told investors at the company's annual meeting in Toronto that he believes gold will continue to serve as a safe haven as economic uncertainty prevails and affects the value of international currencies, stocks and bonds.

"These factors, combined with risk aversion over escalating sovereign credit worries in Europe, position gold to benefit as investors and central banks look for alternatives to major currencies of the world," Regent said.

During the quarter, gold production was up 19 per cent to 2.08 million ounces at a cost of $442 per ounce.

The company said it was on track with its guidance to increase production to between 7.6 million and eight million ounces this year, with costs between US$425 and US$455 per ounce.

"We are anticipating lower costs in 2010, which reflects the increased contribution from our lower-cost mines," Regent said.

"This trend is expected to continue as we bring on Pueblo Viejo and Pascua-Lama over the next three years."

Pueblo Viejo in the Dominican Republic is expected to begin production in the fourth quarter of 2011, while Pascua-Lama on the border between Argentina and Chile, should begin operations in the first quarter of 2013.

Barrick stock was up $1.60 or 3.86 per cent at $43.03 at midday Wednesday on the Toronto Stock Exchange in trading that saw more than 4.3 million shares change hands.

After the annual meeting, representatives for the indigenous people of the Huasco Valley in Chile held a protest against Barrick's development in their communities.

The group alleges that Barrick has wrongfully received approval for its Pascua Lama project from the state without permission from the local community, and that the development has subsequently caused environmental damage. The indigenous community has two lawsuits pending against Barrick in Chile.

Barrick founder and chairman Peter Munk addressed protests against some of the company's operations, noting that he sees a "growing rogue element" intended to stop development plans.

"We are attacked continuously and we are attacked often by a very noisy and very articulate opposition," Munk told shareholders.

"We equally have to stand up (to) those who are just, on principle, against any kind of development, and instead of working constructively with us to create an improved and better mining operation... they say 'Whatever you do, we don't want you."'

Munk told the annual meeting he believes Barrick offers opportunities, like education and employment, to people in remote regions of the world that otherwise wouldn't be available.

The indigenous representatives attended the annual meeting and said they disagreed with the company.

"Most of the people working at the mine do not live in the valley - they are bringing people from the outside," said Idolia del Carmen Bordones Jorquera through a translator.

She said Barrick has also brought in people from outside the community and put them in positions of power to sway opinion in favour of the company.

Barrick has mines and development projects in North and South America, the Caribbean, Africa, Asia, Australia and Papua New Guinea.

 
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