10/27/2011 07:22 EDT | Updated 12/27/2011 05:12 EST

Barrick Gold third-quarter profit rises 45 per cent to record US$1.37 billion

Barrick Gold Corp. (TSX:ABX) says its profits rose 45 per cent to a record US$1.37 billion in the third quarter, helped by the strength of higher gold prices.

Chief executive Aaron Regent said if gold prices remain strong, the company, which raised its dividend on Wednesday by 25 per cent, will continue to look at increasing its payment to shareholders.

"As we get further in to 2012 and if the markets continue to perform as we expect, then clearly we'll be continuing to revisit our dividend levels," Regent told a conference call with financial analysts.

"The fundamentals of our industry are quite positive. We have been and continue to be a major beneficiary of improving prices and it has been reflected in our improving margins, record earnings and cash flow and returns on equity."

Regent said the company will also look to reduce the debt it took on in its $7.3-billion acquisition of copper producer Equinox Minerals earlier this year, but must balance that with investing in new projects and dividends.

The world's biggest gold miner increased its quarterly dividend to 15 cents per share, up from 12 cents, this week.

The increase by Barrick was followed by an announcement by Newmont Mining Corp., one of the world's largest mining companies, that it would increase its dividend by 17 per cent to 35 cents per share.

The Toronto-based gold miner, which reports in U.S. dollars, said it earned $1.37 per share, coming in above analyst expectations of $1.34 per share, according to Thomson Reuters. The results were an improvement from a profit of $942 million, or 96 cents per share a year earlier.

After filtering out one-time items, the company said it earned $1.39 billion, or $1.39 per share, up from $912 million or 93 cents a share a year ago.

Revenues increased to $4 billion, better than analyst targets of $3.89 billion, and up from $2.79 billion in the same period of 2010.

Gold production totalled 1.93 million ounces at a total cash cost of $453 an ounce. That compared with 2.06 million ounces produced in the third quarter of 2010 at a total cash cost of $403 per ounce.

RBC Capital Markets analyst Stephen Walker said the results were in line with his expectations.

He called it a "solid operating quarter with better performance from its gold mines and weaker from the copper mines."

BMO Capital Markets analyst David Haughton said Barrick beat his expectations and rated the stock "outperform" with a US$60 price target.

"Revenues benefited from stronger-than expected operational performance and a higher-than-expected realized gold price," Haughton noted.

Regent noted the company's Pueblo Viejo project in the Dominican Republic and the Pascua Lama project on the border between Chile and Argentina are on track to come into production in mid-2012 and mid-2013 respectively.

Once in production, the two mines are expected to reduce Barrick's average per-ounce costs, he said.

"Pascua Lama is probably one of, if not close to, the lowest cost mine in the world," Regent said.

Regent noted the company was reviewing a decision in Argentina that forces companies to convert export revenues from oil and gas and mining from U.S. dollars to Argentine pesos and back into dollars again before it could be taken out of the country. A transaction fee of 1.2 per cent would apply.

He said Barrick has had initial discussions with Argentine government officials and believed the company could work within the system.

Regent told an investor conference in September that Barrick would look to increase its dividends and share buybacks as it rode a wave of record gold prices.

He noted at the time the company was much stronger than it was even just three or four months ago and said that would play into any decision regarding dividend increases or buybacks.

In addition to Pueblo Viejo and Pascua-Lama, Barrick also has the Cerro Casale in Chile and the Donlin Gold project, which it holds jointly with NovaGold Resources (TSX:NG).

Costs estimates at Donlin recently jumped by more than 50 per cent to US$7 billion, pushed higher by the addition of a US$1 billion for a natural gas pipeline to feed a power plant that will produce electricity for the planned mine.

Barrick owns and operates gold mines in Canada, Peru, and Australia and has major projects in the Dominican Republic, Nevada, and on the Argentina-Chile border.

Shares in the company were up 12 cents at C$48.31 on the Toronto Stock Exchange on Thursday.