Like all precious metals companies, Barrick Gold Corp (GOLD -1.98%) was hit hard by the commodity downturn. But this top gold stock has been working hard to right its business, including trimming its heavy debt load. That said, production at this gold giant has also been falling, which isn't great for growth. However, the worst mistake Barrick Gold investors can make right now is worrying too much about that falling production. Here's why.

The growth of a miner

Broadly speaking there are two ways a mining company can see its top line expand. The first is that the price of the commodities it excavates go up, something totally out of a miner's control. The second is for it to bring more of those commodities out of the ground, which is largely within a miner's control. This is why investors generally like to see miners expanding their output. It shows fundamental growth in the business.    

A collection of Barrick Gold employees.

Image source: Barrick Gold Corp.

Here's the problem for Barrick Gold investors... Production was down 10% in 2016, falling from 6.1 million ounces in 2015 to 5.5 million ounces in 2016. Production in 2014 was 6.25 million ounces and it was nearly 7.2 million ounces in 2013. Notice the trend? It's not going in the right direction.  

This is something investors should be watching closely, but it would be a mistake to focus too much on this one number. That's because other things have been taking shape as Barrick's production has been falling.  

Barrick Gold's debt has fallen from $13.1 billion to $7.9 billion.

Barrick Gold is paying down its debt.  Image source: Barrick Gold Corp

Getting smaller, but stronger

Barrick was heavily leveraged when the commodity bear market hit. At the end of 2013 the gold miner's total debt was roughly $13.1 billion. Fixing that debt overhang became a key priority as the company faced a deep industry downturn. By the end of 2016 debt had fallen to roughly $7.9 billion, a huge 40% reduction.  

Barrick isn't done, either. It wants to get long-term debt to roughly $5 billion by the end of 2018. That would represent a 60% reduction from its 2013 highs. Deleveraging like this materially decreases the company's interest expense. To put a number on that, the company's interest expense dropped nearly 24% between 2013 and 2016. Interest expense should continue to fall as Barrick moves down toward that $5 billion debt goal.  

And it's rewarding investors for its success. The miner increased its dividend by 50%, from $0.02 a quarter to $0.03, in February. A key reason cited for the move was debt reduction. Reading a little into that dividend decision, despite production falling, Barrick clearly believes the business is strengthening.  

The thing is, a key part of the deleveraging effort was selling non-core assets. Some of the deals were notable, including the $610 million sale of U.S. assets to Kinross Gold Corporation in 2016. Some were tiny, like the sale of Barrick's 33% minority stake in the Marigold mine to Silver Standard Resources Inc. for $86 million in 2014.  

Barrick Gold is projecting production declines over the next couple of years.

Barrick's production is still heading lower.  Image source: Barrick Gold Corp.

Here's the problem, Barrick was doing the right thing to make itself a more financially stable company. But achieving that goal meant selling assets, which led to falling production. And while production is expected to jump a little bit this year, it's projected to fall again in 2018 and 2019. By that point, however, Barrick will be in much better financial shape and should be able to start looking for growth again -- if not sooner.  

Wait for it...

So Barrick's production growth profile is less than compelling today. But it still remains one of the largest gold miners on the planet. And despite falling production, the company is getting financially stronger. That's something that will position it for long-term success. If you are looking for a large miner, Barrick should be on your short list if you don't own it already. But whatever you do, don't get too fixated on Barrick's falling production numbers... there are other things going on that are just as important to the company's future.