TORONTO (miningweekly.com) – The world's biggest gold miner, Canadian Barrick Gold, on Thursday reported a big net loss for the third quarter, essentially because of a $5,7-billion accounting charge related to the company's announcement that it will eliminate its gold hedges.

The firm lost $5,4-billion, compared with a $254-million profit a year earlier.

However, stripping out some one-off items, adjusted net income was $473-million, up 17% from $404-million in the third quarter of 2008.

Operating cash flow increased 67%, to a best-ever $911-million, Barrick said.

"Our operations delivered another strong quarter, positioning us well to meet our production and cost targets for the year," CEO Aaron Regent said in a statement.

"We have dealt decisively with our gold hedges which will be completely eliminated within 12 months."

Barrick announced last month it would remove its forward gold sales so that it can gain full exposure to soaring bullion prices, and subsequently raised a total of $5,1-billion by selling equity and debt.

The company said at the time that it would use about $1,9-billion to eliminate the three-million ounces of fixed-price gold hedges, and the remainder would go towards settling a chunk of its floating spot price contracts. The floating contracts stood at 6,5-million ounces, with a negative mark-to-market position of $3,7-billion, at September 7.

As of October 28, the company's fixed-price gold hedges had been reduced to 1,9-million ounces, with a remaining liability of $1,3-billion, and the floating contracts liability had been reduced to $1,5-billion, Barrick said on Thursday.

The Toronto-based gold-miner produced 1,9-million ounces in the third quarter, a decline compared with output of 1,95-million in the same period last year, but in line with expectations.

Barrick said it still expects to meet its earlier production guidance of between 7,2-million and 7,6-million ounces of gold this year.

Cash costs in the quarter before byproduct credits were $456/oz, and the company maintained its full-year forecast for costs of $450/oz to $475/oz.

The average realised gold price for the quarter was $971/oz, compared with $874/oz in the same period of 2008.

Barrick shares rose 6,75% on Thursday, to C$39,54 apiece by 16:00 in Toronto.

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