Barrick Reports $405 Million Impairment Charge In Q3 Earnings
(Kitco News)- Barrick Gold Corp. (NYSE: ABX,TSX: ABX) lateWednesday reported a net loss of $412 million, or 35 cents per share,compared to a loss $11 million, or a penny, in the third quarter of 2017.
The July-September net loss was mostly due to a $405 millionimpairment charge at the Lagunas Norte mine in Peru, the company said. Therewere also several other special items, including a $62 millionforeign-currency-translation loss due to weakening of the Argentine peso.
In total,the company said that adjusted net earnings for the fourth quarter that werelower than a year ago as the prices of metals fell.
Excluding special items,Barrick reported an adjusted profit of $89 million, or 8 cents per share, downfrom $200 million, or 17 cents, in September 2017. The company said the declineis primarily the result of lowergold and copper prices, increased direct mining costs due to higher fuelconsumption and prices, and planned maintenance at Pueblo Viejo.
The averagerealized gold price fell to $1,216 an ounce from $1,274 in the year-ago period,while copper prices fell to $2.76 a pound from $3.05, a decline of 4.5% and 9.5%respectively.
Late in thequarter, the company announced an agreement for Barrickto acquire Randgold Resources Ltd. (Nasdaq: GOLD) in an all-stock merger to create the largest gold producer inthe world. Since the proposed merger wasannounced, Barrick and Randgold shares have risen by 25% and 28%, respectively,creating $4.8 billion in combined market value, Barrick reported. A specialmeeting of Barrick shareholders will be held on Nov. 5 to approve the issuanceof Barrick common shares for the acquisition of Randgold.
Barrick produced 1.15million ounces of gold in the third quarter of 2018 at all-in sustaining costsof $785 per ounce. The company produced 106 million pounds of copper in thethird quarter at AISC of $2.71 per pound.
Officials said Barrickremains on track to meet its full-year gold and copper production guidance. Thecompany expects gold output of 4.5 million to 5 million ounces at AISC of $765to $815 per ounce, with projected production of some 1.25 million ounces in thefourth quarter. Full-year guidance for copper production is in the range of 345million to 410 million pounds at AISC of $2.55 to $2.85 per pound.
By Allen SykoraFor Kitco News
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asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. |