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TORONTO (miningweekly.com) – The world largest gold producer Barrick Gold on Wednesday reported a second-quarter loss of $269-million, or $0.23 a share, weighed down in the three months ended June 30 by an impairment charge of $514-million related to the long-delayed Jabal Sayid copper project, in the Kingdom of Saudi Arabia.
Second-quarter adjusted net earnings were $159-million, or $0.14 a share, compared with $663-million, or $0.66 a share, in the same quarter last year. The decrease was mainly owing to lower realised gold and copper prices and lower gold and copper sales volumes.
Headline earnings underperformed Wall Street-analyst expectations of $0.16 a share, on revenue of $2.47-billion.
Barrick reported a 24% year-on-year slide in second-quarter revenue to $2.43-billion, derived from selling 1.5-million ounces of gold, which was 16.5% less than the year-earlier quarter.
Output declined 18% year-on-year to 1.5-million ounces.
Barrick reduced its 2014 all-in sustaining cost (AISC) guidance to between $900/oz and $940/oz and adjusted operating cost guidance to $580/oz to $630/oz.
The NYSE- and TSX-listed miner also reduced its capital expenditure guidance range by $200-million to between $2.2-billion and $2.5-billion from $2.4-billion and $2.7-billion.
The company’s five cornerstone mines comprising Cortez, Goldstrike, both in Nevada, Pueblo Viejo, in the Dominican Republic, Lagunas Norte, in Peru, and Valadero, in Argentina, produced 896 000 oz of gold at average AISC of $730/oz in the second quarter. These mines were expected to contribute about 60% of the company’s total output this year, at average AISC of $750/oz to $800/oz.
Barrick expected to produce between six-million ounces and 6.5-million ounces of yellow metal this year.
The miner said the temporary suspension of construction at the stalled multibillion-dollar Pascua-Lama project straddling the Chile/Argentine border, was now fully implemented, except for activities required for environmental and regulatory compliance.
The miner also reported copper output of 67-million pounds at C1 cash costs of $2.04/lb, down from 134-million pounds and up from $1.75/lb, respectively, compared with the same quarter last year. Lumwana, in Zambia, contributed 12-million pounds at C1 cash costs of $2.49/lb, reflecting a partial collapse of the main conveyor in mid-April which suspended processing activities. The conveyor was repaired and normal plant operations resumed in July, ahead of schedule.
Barrick expected to produce between 410-million pounds and 440-million pounds of copper this year at C1 cash costs of $1.90/lb to $2.10/lb.
In July, Barrick reached an agreement to form a joint venture with Saudi Arabian Mining Company (Ma'aden) to operate the Jabal Sayid copper project. Ma’aden would buy a 50% stake in the project for $210-million – a move that was expected to result in first output from the long-delayed mine in late 2015.
The transaction was expected to close in the fourth quarter and first output was expected in late 2015, with average yearly output of 100-million to 130-million pounds of copper in concentrate at first-quartile C1 cash costs during its first full five years of operation.
Barrick also announced the appointment of Michael Evans, the former vice-chairperson of Goldman Sachs, and Brian Greenspun, the former chairperson and CEO of Greenspun Media Group and a prominent Nevada businessperson, as independent directors on its board.
Toronto-based Barrick this month revealed that it would replace its CEO position with two co-presidents. Senior executive VP for corporate and government affairs Kelvin Dushnisky and COO Jim Gowans were named co-presidents with the overall responsibility for execution of the company's strategic priorities and operating plans.
Barrick shares trading on the NYSE on Wednesday closed down $0.12 a share at $18.47 apiece.