output@ (New throughout, recasts to show Newmont nearing world-leading production, adds CEO quote, background on dividend increase, reserve and resource data, exploration spending)
TORONTO, Feb 22 (Reuters) - Newmont Mining Corp reported a better-than-expected quarterly profit on Thursday and maintained a production prediction that would see it take the title of world's largest bullion producer from rival Barrick Gold.
Newmont, which has mines in the Americas, Africa and Australia, said fourth-quarter gold output nudged 1.4 percent higher to 1.34 million ounces, matching Barrick's performance, as prices rose 6.5 percent to $1,270 per ounce.
In the next two years, Colorado-based Newmont sees annual output between 4.9 million and 5.4 million ounces of gold, then between 4.6 million and 5.1 million ounces annually through 2022.
In contrast, Toronto-based Barrick cut its 2018 forecast to between 4.5 million and 5 million ounces of gold, while targeting 4.2 million to 4.6 million ounces of annual production from 2019 to 2022.
Newmont said low-cost production from newer mines, coupled with productivity gains, helped drive an 88 percent gain in full-year free cash flow to $1.48 billion.
"This performance gave us the means to invest in five new projects, raise our dividend by 87 percent, and increase our investment in exploration an investment that paid off as we added 6.4 million ounces of gold to our reserve base, offsetting depletion for the first time in five years," said Chief Executive Gary Goldberg in a statement.
Newmont, which ended the quarter with $3.3 billion cash on hand, reported adjusted profit of 40 cents per share, above analysts' average forecast of 38 cents a share, according to Thomson Reuters I/B/E/S.
The all-in sustaining costs to produce an ounce of gold a key industry benchmark rose 5.4 percent to $968.
The miner lifted its 2018 capital budget to $1.2 billion to $1.3 billion from a December forecast of $900 million to $1 billion, citing a range of projects.
Earlier this week, Newmont revised its dividend policy with a quarterly payout of 14 cents per share, replacing its previous gold-price linked plan.
On Wednesday, the company reported gold reserves of 68.5 million ounces for 2017, unchanged from 2016, as it replaced reserves through exploration, projects, revisions and acquisitions. Gold resources were up 1 percent, to 48.2 million ounces.
The company also said it plans to spend approximately $230 million on exploration in 2018, earmarking some 39 percent for North America, 20 percent for Australia and the remainder for South America, Africa and other locations. (With additional reporting by Karan Nagarkatti in Bengaluru; Editing by Shounak Dasgupta and Bill Trott)