TORONTO (miningweekly.com) – The world’s top gold producer has reported a 74% drop in adjusted earnings for the three months ended March 31, as the lower gold price and fewer sales weighed on the bottom line.

Canada-based Barrick Gold reported adjusted net earnings of $238-million, or $0.20 a share, compared with $923-million, or $0.92 a share in the first quarter of 2013.

The first-quarter profit was just lower than the $0.19 a share that Wall Street analysts had on average expected.

For the period, net earnings fell 89.6% to $88-million, or $0.08 a share, over with net earnings of $847-million, or $0.85 a share. Among the special items were $113-million in unrealised foreign currency translation losses, $30-million in demobilisation costs related to the ramp-down of Pascua-Lama; and $18-million in realised and unrealised gains on non-hedge derivative instruments.

Barrick almost halved its first-quarter operating cash flow to $585-million, compared with $1.09-billion, reflecting the lower net earnings, partially offset by a decrease in income tax payments.

"Barrick is a considerably different company today than it was a year ago - leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of $833/oz, $100/oz below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results," Barrick president and CEO Jamie Sokalsky said.

The company produced a total of 1.59-million ounces of gold in the quarter, 12% lower than in the comparable quarter a year earlier.

First-quarter revenue sank 23% to $2.63-billion, as the company sold only 1.62-million ounces, down 7% from 1.7-million ounces last year.

The average realised gold price fell 21% to $1 285/oz, while the spot gold price averaged at $1 293/oz in the period.

Sokalsky noted that the company would continue to focus on assets that could generate the most attractive risk-adjusted returns and free cash flow, and was are “decisively” addressing its under-performing operations.

Sokalsky said that Barrick was focusing its attention on its Nevada operations and development projects to provide production growth in the medium term. Among its operations there is the Goldrush project, near the Cortez mine, which was undergoing a pre-feasibility treatment, which is on schedule to be complete in mid-2015.

Barrick also noted that its Turquoise Ridge mine contains more than 6.7-million ounces in reserves at an average grade of 0.51 oz/t, the highest reserve grade deposit in the company’s operating portfolio. It is currently considering adding an additional shaft to reduce underground haulage distances that could increase output by 75% for five to eight years. A prefeasibility study on this scenario is expected late this year.

During the fourth quarter of 2013, Barrick announced the temporary suspension of construction at its roughly $8.5-billion Pascua-Lama copper/gold project straddling the Argentine/Chilean border, except for activities required for environmental and regulatory compliance.

The company on Wednesday said that the ramp-down was on schedule to be complete by midyear and that the majority of demobilisation had already taken place. The company expects to incur costs of about $300-million this year for the ramp-down and environmental and social obligations.

It said that a decision to restart development would depend on improved economics and reduced uncertainty related to legal and regulatory requirements. The remaining development would take place in distinct stages with specific work programmes and budgets to facilitate more efficient execution and improved cost control.

Barrick said that it continued to explore opportunities to improve the project's risk-adjusted returns, including strategic partnerships or royalty and other income streaming agreements.

Toronto-based Merchant Law Group has started Canada-wide multibillion-dollar shareholder class actions against Barrick Gold, and three of its senior officers.

Merchant Law Group said that it had the class actions with the Courts in Ontario and Alberta, seeking compensation for purchasers of Barrick securities from May 7, 2009, to May 23, 2013.

The plaintiffs allege that throughout that time, Barrick’s public disclosures misrepresented the status of its roughly $8.5-billion Pascua-Lama copper/gold project straddling the Argentine/Chilean border.

The class actions allege that Barrick shareholders lost billions of dollars as a result of Barrick's misrepresentations and failures regarding the Pascua-Lama mine project.

Barrick had not responded to repeated requests for comment for comment on the class actions.

During the first quarter, Barrick also produced 104-million pounds of copper at net direct cash costs (C1) of $2.11/lb. Lumwana, in Zambia, contributed 51-million pounds at C1 cash costs of $2.58/lb, reflecting the effects of an extended and unusually heavy rainy season.

Barrick said that after the quarter ended, a partial collapse of the terminal end of the main conveyor occurred, estimating that copper output was only likely to restart by the end of the third quarter. Meanwhile, mining would continue and stockpiled ore would be processed once the plant restarts.

The Zaldívar mine, in Chile, produced 53-million pounds of copper in the first quarter at C1 cash costs of $1.63/lb.

Barrick adjusted its copper output guidance for the year to between 410-million and 440-million pounds, down from 470-million to 500-million, to reflect the processing disruption at Lumwana. C1 cash cost guidance remains unchanged at $1.90/lb to $2.10/lb.

In the past two years, Barrick's NYSE-listed stock had lost 56% of its value, and on Wednesday traded at $17.72 apiece.