Barrick expects to take up to $3 billion in impairment charges

Thu Jan 21, 2016 6:38pm EST
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(Reuters) - Barrick Gold Corp (ABX.TO: Quote), the world's biggest gold producer, said it expects to take charges of up to $3 billion following an annual accounting impairment review.

The company said it may have to take a goodwill impairment charge of about $1.8 billion, and asset impairment charges of $1.0-$1.2 billion, based on its preliminary analysis.

The asset writedown is primarily related to its Pascua-Lama mining project, on the border of Chile and Argentina, and its Pueblo Viejo project in Dominican Republic.

Barrick also said it met its $3 billion debt reduction target through non-core asset sales.

Pueblo Viejo, which is jointly owned by Barrick and rival Canadian producer Goldcorp Inc (G.TO: Quote), in November faced mechanical problems resulting in reduced production in operation until mid-January 2016.

The Pascua-Lama project, which was suspended in 2013, has been facing complications from Chile's environmental regulator SMA.

The company said on Thursday it assumes gold price of $1,000 per ounce for 2016 and a long-term gold price of $1,200 per ounce, for impairment testing purposes.

Barrick estimated 2015 gold production of 6.12 million ounces of gold, in line with its expectations of 6-6.15 million ounces.

The company said 2015 copper production was estimated at 511 million pounds, also in line with its expectations of 480-520 million pounds.   Continued...

An overview of Barrick Gold Corporation's Pueblo Viejo gold mine, one of the world's largest, is seen in Cotui December 11, 2013. REUTERS/Ricardo Rojas