(Minews) - Canada’s Barrick Gold logged another set of poor results Thursday, marked by a US$2.82 billion impairment charge on mines, a sharp drop in reserves, and a forecast of much lower gold production for the year.
The world's largest gold miner slashed its gold reserves 26%, saying they fell at the end of 2013 to 104.1 million ounces from 140.2 million ounces a year earlier. Barrick explained it calculated its reserves for the year using a gold price assumption of $1,100 an ounce, well below the $1,500 an ounce applied in 2012.
The Toronto-based company also announced capital-spending cuts of about 50%.
"2013 was a tough year for Barrick by any measure," Jamie Sokalsky, president and chief executive, said in a statement.
No kidding. After stripping all the impairments on its halted Pascua-Lama project and other troubled operations, adjusted earnings were $410 million, or 37¢ a share, lowered than the average analyst estimate of 41¢. Last year the company’s adjusted earnings were $1.16 per share.
And there is more: Net loss for the entire year climbed up to a monster $10.37 billion caused by the numerous writedowns, especially on Pascua-Lama.
Expect lessWhile Barrick produced 7.2 million ounces of gold last year, it said it expects that number to drop between 6-6.5 million ounces in 2014, significantly lower than the 9 million ounces the miner once aimed to produce.
Analysts have predicted gold miners will be posting lower production. So far, fellow Canadian gold Kinross Gold Corp said its fourth quarter production was down almost 11% from the same period last year.
