Barrick Profit Triples on Gold Rally, Rising Output (Update1)

May 3 (Bloomberg) -- Barrick Gold Corp., which bought rival Placer Dome Inc. this year to become the world's biggest gold producer, said first-quarter profit more than tripled as prices surged and the company increased production.

Net income rose to $224 million, or 29 cents a share, from $66 million, or 12 cents, a year earlier, the Toronto-based company said today in a statement. Sales more than doubled to $1.25 billion from $484 million.

Gold output jumped 71 percent to 1.956 million ounces as Barrick opened new mines in Peru and Argentina and gained reserves in Nevada, Australia, South Africa and Tanzania through its $10 billion acquisition of Placer Dome. Barrick sold its gold on average at $537 an ounce, up 25 percent.

``They certainly have a good growth profile,'' said Adrian Day, who manages $105 million at Annapolis, Maryland-based Adrian Day's Asset Management. ``They've got some really good development projects in the pipeline that needed a high gold price. With gold at $650, their pipeline is attractive,'' said Day, who is considering to buy Barrick shares.

Shares of Barrick fell 20 cents to C$34.40 at 4:19 p.m. on the Toronto Stock Exchange. They have risen 21 percent in the past year.

Gold Rally

Gold prices in New York averaged 30 percent higher at $557.40 an ounce during the quarter as investors sought a hedge against inflation and diversified from stocks and bonds. Prices are up 56 percent in the past year and reached a 25-year high of $679.80 today.

Barrick reiterated its forecast of production of 8.6 million to 8.9 million ounces this year, up from 5.46 million ounces last year, because of the Placer Dome acquisition on Jan. 19. Total cash costs this year will range between $275 and $290 an ounce of gold compared with $227 last year, Barrick said.

During the first quarter, cash production costs rose 17 percent to $283 an ounce, the company said.

Newmont Mining Corp. was the world's biggest gold producer in 2005, with 6.43 million ounces, followed by Johannesburg- based AngloGold Ashanti Ltd. and Barrick.