Barrick Gold cuts dividend after US$8.6-billion loss due to falling metal prices
August 1, 2013 – Toronto, Canada (Source: MontrealGazette) — Barrick Gold Corp. (TSX:ABX) is reporting a US$8.56 billion loss and lowering its quarterly dividend in the wake of lower prices for bullion and copper, the Toronto-based company announced Thursday.
The company said its operating mines performed well during the period but steps must be taken to deal with the changed market conditions.
As a result, Barrick will reduce its quarterly dividend to five cents US per share and taking steps to lower its operating costs by lowering employment levels and capital spending.
Barrick said it’s recognizing an US$8.7-billion impairment item in the second quarter, mainly due to lower metal prices.
Excluding unusual items, Barrick had adjusted earnings of US$663 million or 66 cents in the quarter ended June 30 — better than the analyst estimate but down from 82 cents per share last year.
“Over the past year, we have taken and are continuing to take a series of steps to reduce costs as part of our disciplined capital allocation framework, which allowed us to respond quickly to the new metal price environment,” said Jamie Sokalsky, Barrick’s president and CEO.
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“The bulk of our expected 2013 gold production is at all-in sustaining costs well below current spot levels, and for those operations that are not generating positive cash flow, we will change mine plans, suspend, close or divest them.”
Barrick is one of the world’s largest gold producers, so it has been badly affected by the major drop in the price of gold this year.
It has also been suffering from troubles in constructing a major new mine in South America, which faces delays for environmental reasons.
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