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Aaron Regent, President and CEO of Barrick Gold.PETER JONES

It was with a bittersweet tone that Peter Munk, chairman of the world's largest gold company, congratulated his chief executive officer Wednesday for another quarter of stellar results.

Barrick Gold Corp. reported a 3-per-cent rise in first-quarter profit and announced an increase in its dividend as higher gold prices helped it offset higher cash costs.

"What more can you ask for? Record results for six years in a row. Great fundamentals, exceptional performance, meeting guidelines, social responsibility, high quality of people and employment, a great team of management, a leading position in your industry – for God's sakes, the world should be at your feet," Mr. Munk told CEO Aaron Regent and other officers at the company's annual general meeting in Toronto.

The results met analysts' expectations but even so, stock in Barrick closed 2.7 per cent lower in Toronto, about 30 per cent off 52-week highs set in September.

Market pundits say investors are abandoning the gold sector due to uncertain growth prospects and perceptions of increased risk around existing deposits that have yet to be developed. The case of Kinross Gold, which was forced to write down $2.94-billion on its flagship Tasiast mine project in Africa just a year after acquiring the asset, is seen by some as a warning of what can go wrong.

Other gold stocks under siege include No. 2 Canadian miner Goldcorp Inc., valued at $37.54 a share these days and off roughly the same amount as Barrick. Kinross Gold has seen its market capitalization chopped by more than half in the past eight months.

Barrick, which produces more than seven million ounces of gold a year, reported a profit of $1.03-billion (U.S.) or $1.03 a share for its first quarter, as gold prices jumped 22 per cent from a year earlier.

The miner raised its dividend 33 per cent and Mr. Regent, who also holds the title of president, promised that three new projects to come on stream this year and next will add significantly to cash flow.

Pueblo Viejo, the Dominican Republic project that starts production this year; and Pascua Lama, the gold project straddling the Andean mountains between Chile and Argentina and due to start production next year, will make Barrick a nine-million-ounce-a-year gold producer.

The Jabal Sayid project in Saudi Arabia will add up to 45 million pounds of copper production this year.

"We used to be able to show the kind of achievements that made Barrick, year in and year out, the best-performing stock … and there is now a divergence," said Mr. Munk, who built the Toronto-based company after humble beginnings as an immigrant from Hungary.

"There are many reasons for that, but not to face up to it and not to talk about it would be the greatest mistake a board and management and people responsible for the welfare of this company could do," he said, otherwise describing the company as a text-book example of success worthy of Harvard Business School.

Mr. Munk also said he believes the fundamental driver of a mining company is the value of the metal it produces, even though gold prices are hovering near all-time highs as Barrick stock wallows.

Eventually, he said, Barrick's stock price will reflect both the company's strength and the value of gold.

"We made good progress on a number of areas in the quarter," Mr. Regent said. "We had good operating performance, which translated into solid financial results and further advanced our projects under construction with Pueblo Viejo and Jabal Sayid to start producing this year and Pascua Lama in the middle of next year."





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