Barrick Gold has $269M loss on weak gold, copper prices

Written By Unknown on Kamis, 31 Juli 2014 | 22.40

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Barrick Gold reported a $269 million loss, but says it has been successful in cutting production costs. (Adam Tanner/Reuters)

Barrick Gold Corp. had a $269-million net loss on lower earnings in the second quarter, in part because of a $514 million impairment charge on the sale of its stake in the Jabal Sayid mine in Saudi Arabia.

It missed analysts projections both on profits and adjusted earnings, which came in at $159 million or 14 cents a share, down from 66 cents a year earlier.

Net loss per share was 23 cents per share, far less than the net loss of $8.56 billion or $8.55 cents a year before. Analysts had been looking for a net profit of 19 cents per share.

Barrick said it faced lower gold and copper prices and lower sales volumes compared with the second quarter of 2013.

Mining companies have been under pressure to cut costs and sell assets as commodity prices remain low. Barrick was successful in bringing its costs down, according to outgoing CEO Jamie Sokalsky.

"Second quarter all-in sustaining costs of $865 per ounce in a lower production quarter clearly demonstrate our ongoing and relentless focus on companywide cost management,"  Sokalsky said in statement. "The commitment by our mine managers to cost reduction and capital efficiency has allowed us to lower our midyear operating and capital cost guidance for the second year in a row."

The company now projects costs of $900 to $940 an ounce for gold for 2014, compared to world gold prices of $1,286 an ounce..

The Toronto-based mining company's revenue for the three months ended June 30 was $2.43 billion, which was down from $3.2 billion a year earlier but in line with estimates.

The company is in the midst of a management shakeup with Sokalsky leaving after chair John Thornton eliminated the CEO position and appointing two presidents. 

Barrick's board appointed two new independent directors — J. Michael Evans, former vice chairman of Goldman Sachs and Brian Greenspun, former chairman of Greenspun Media Group. Major stakeholders had called for more independent expertise on the board with the resignation of Peter Munk.


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