Canadian Mining Journal

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GOLD: Barrick weighed down by $2.9B losses

TORONTO – Barrick Gold produced 6.25 million oz of gold in 2014, not a record, but at an all-in sustaining cost of US$864 per oz, it might have netted the company a healthy balance sheet. Instead, the world's largest gold producer lost a...


TORONTO – Barrick Gold produced 6.25 million oz of gold in 2014, not a record, but at an all-in sustaining cost of US$864 per oz, it might have netted the company a healthy balance sheet. Instead, the world’s largest gold producer lost a staggering US$2.85 billion in Q4 with the write-downs of the Lumwana mine in Zambia (US$930 million) and the Cerro Casale project in Chile (US$778 million). Total revenues for last year were US$10.24 billion.

For the full year 2014, Barrick recorded a net loss of $2.91 billion ($2.50 per share), reflecting the impact of $3.4 billion in after-tax impairment charges. Adjusted net earnings for 2014 were $793 million, and operating cash flow was $2.30 billion.

In an attempt to reduce the corporate debt by at least US$3 billion by the end of 2015, Barrick plans to implement a leaner, decentralized operating model. Non-core assets are also on the block. The company announced its intention to divest its 95% interest in the Porgera joint venture in Papua New Guinea and the Cowal mine in Australia.

The Pascua-Lama project on the Chile-Argentina border remains stalled, but Barrick pointed out several other growth projects in the Americas. The Goldrush project is a new discovery only 6 km from the Cortez mine in Nevada where the next step is underground exploration. A prefeasibility study is underway for an underground expansion of the Cortez mine. Production could be doubled to 500,000 oz of gold per year with the addition of a second shaft at the Turquoise Ridge mine (Barrick 75% and Newmont Mines 25%) also in Nevada. The Spring Valley oxide heap leach project (Barrick 70% and 75 km from Cortez) is also touted as having potential.

For 2015 Barrick has offered gold guidance of US$860 to US$895 per ounce AISC and production of between 6.2 million and 6.6 million oz. Copper guidance is 310 million to 430 million lb at C1 cash costs of US$1.75 to US$2.00 per lb.

Visit the company’s website at Barrick.com for Q4 and year-end 2014 details.