Barrick posts loss on impairment charge, cuts dividend
By Julie Gordon
TORONTO (Reuters) - Barrick Gold Corp (ABX.TO: Quote) posted an $8.7 billion writedown on Thursday, the largest yet in a series of charges taken by gold miners, but results were above expectations, sending its beaten-down shares higher.
The world's largest gold producer also slashed its dividend by 75 percent on the falling gold price, although cost cutting paid off as it lowered capital spending forecasts for the year and cut its production cost estimates.
Gold miners have announced billions in writedowns over the last two years, as ill-advised deals, underperforming projects and plunging prices for the metal wreaked havoc on their books.
In the second quarter alone, Barrick rivals Goldcorp Inc (G.TO: Quote), Newmont Mining Corp (NEM.N: Quote) and Kinross Gold Corp K.TO have posted a combined $6 billion in impairment charges linked to the plunging gold price.
But Barrick's charge, just months after it posted a $4.2 billion writedown linked mainly to its Lumwana mine in Zambia, is the largest for a gold miner in recent years.
About $5.1 billion of the latest charge stems from the company's delayed Pascua-Lama gold mine in South America, with the rest linked to other assets and goodwill.
Toronto-based Barrick said in June that Pascua-Lama, on the border between Chile and Argentina, had been delayed until mid-2016. Regulators have halted work on the Chilean side until Barrick completes a new water management system.
The delay helped Barrick reduce capital spending for the year by about 20 percent, to between $4.5 billion and $5.0 billion, although it warned that the cost of building Pascua-Lama would likely rise over the current budget of $8.5 billion. Continued...