GOLD 1218.95 $/ozChange: 1.69
PLATINUM 1331.00 $/ozChange: -1.00
R/$ exchange 11.13Change: -0.06
R/€ exchange 14.30Change: -0.09
We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
close notification
powered by
Advanced Search
World News
S&P's lowers Barrick Gold’s credit rating to BBB+
Embed Code Close
30th July 2012
Text Smaller Disabled Text Bigger

TORONTO ( – Ratings agency Standard & Poor’s (S&P's) on Monday lowered gold producer Barrick Gold’s corporate credit rating to BBB-, from it previous A+ standing.

S&P's said the downgrade follows the company's announcement of a capital cost increase of close to $2.5-billion and a one-year delay to production start-up at its multibillion-dollar Pascua-Lama gold/silver project.

Barrick, the world's biggest gold miner, last week said lower productivity and persistent inflationary and other cost pressures had resulted in a 50% to 60% increase in capital costs at its $5-billion Pascua-Lama project, on the Chile/Argentina border. It blamed the cost increases mainly on a decision to manage construction of the mine using an in-house team, rather than an outside contractor.

“We believe that the latest revisions to Pascua-Lama likely precludes any meaningful balance-sheet deleveraging in the next 12 months, which would be necessary to return the company's financial metrics to comfortably within our expectations for the 'A-' rating, including a debt-to-Ebitda [earnings before interest, taxes, depreciation and amortisation] leverage ratio sustainably below 2x,” the ratings agency said.

S&P's added that the negative outlook on Barrick reflected the agency’s view that the execution risks surrounding Pascua-Lama could potentially stretch the company's credit measures and free operating cash-flow generation beyond the levels the agency had assumed within its base case scenario.

Edited by: Creamer Media Reporter


To subscribe to Mining Weekly's print magazine email or buy now.

FULL Access to Mining Weekly and Engineering News - Subscribe Now!
Subscribe Now Login
Picture by: Barrick Gold