(Minews) - Barrick Gold Corp, the world’s biggest gold miner by production, announced a fourth quarter net loss of $2.85 billion as the Canadian company added billions of dollars in impairments to the long list of write downs it has already made.
The net loss for the fourth quarter was $2.85 billion, $2.45 per share, compared with a net loss of $2.83 billion, $2.61 per share, for the quarter in 2013.
Adjusted earnings fell to $174 million, or 15 cents a share in the final quarter of 2014 from $406 million, or 37 cents a year earlier, above the 13 cents analysts polled by Thomson Reuters were expecting.
The company announced that it had started a process to sell its Cowal mine in Australia and a joint venture in Papua New Guinea as it looks to reduce debt by $3 billion this year.
Miners around the world are looking to sell assets and trim costs after years of bulking up during a decade long commodity boom. But many have struggled to actually sell their assets, given rival firms’ caution on mergers and acquisitions and hesitation by investors and banks to fund purchases in the current environment.
Barrick’s sales followed years of buying mines around the world. Among the most costly was its debt-financed $7.65 billion takeover of Equinox Minerals Ltd. in 2011.
That purchase included the Lumwana mine, an operation in Zambia, which on Wednesday the company said was partly behind a $2.8 billion in after-tax impairment charges. Barrick suspended the mine last December after Zambia passed legislation to increase royalty taxes. The company said that the write downs were also related to its Cerro Casale mine in Chile.
In recent years the company has written down billions of dollars in the value of assets, amid a decline in the price of gold and as prices paid for projects during the mining boom failed to realize their anticipated value. That includes around $6 billion in write-downs for its massive Pascua-Lama project on the Chile-Argentina border.
Barrick said it expects to produce 6.2 to 6.6 million ounces of gold this year and 310 340 million pounds of copper. It forecasts costs of $860 to $895 per ounce of gold for 2015.
The company said it produced 6.25 million ounces of gold at all-in sustaining costs of $864 per ounce in 2014, lower than its projected cost of $880 to $920 an ounce for the year.
The company said that it was continuing to cut costs and would reduce the size of its head office by almost half to 140 positions. Barrick also wants to become more “decentralized” in a bid to return it to what it calls its more entrepreneurial roots, a mantra that Chairman John Thornton has used since taking that role in April last year with the retirement of founder Peter Munk.
Mr. Thornton has shaken up the company, making several changes to its senior personnel. Former Chief Executive Jamie Sokalsky left the company to be replaced by dual chief executives. Investors though, say the former Goldman Sachs banker has to deliver better results and the sort of investments into the company that he promised when taking up his role.
Gold miners have been hit hard by a fall in the price of gold that has seen it lose over a third of its value since it peaked in 2011. Copper prices have been hit by concerns of slowing growth, particularly in China, the world’s biggest buyer of the industrial commodity.
