Barrick Gold Corp. on Wednesday cut its quarterly dividend and
posted a second-quarter net loss, as slumping gold prices continued
to weigh on the world's largest gold producer.
Toronto-based Barrick's results were in line with analyst
estimates and the mining company took a major step in its
debt-reduction goal, inking a $610 million streaming agreement for
production from the Pueblo Viejo mine in the Dominican
Republic.
Barrick posted a net loss of $9 million, or 1 cent a share, in
its latest quarter. Adjusted to exclude items, it earned 5 cents a
share, in line with the Thomson Reuters mean estimate. Revenue fell
to $2.23 billion from $2.46 billion, but was also in line with
analyst expectations.
The gold and silver streaming deal announced Wednesday with a
unit of Royal Gold Inc. brings Barrick to 90% of its target for
reducing its debt load by at least $3 billion by the end of this
year.
The price of gold has slumped more than 40% since its peak in
September 2011 and last month dipped below $1,100 an ounce for the
first time in more than five years. Barrick and its peers have been
forced to cut costs and sell mines in the wake of slumping
prices.
The company said it has received a number of proposals and
expressions of interest related to various noncore assets in Nevada
and Montana and now plans to start a formal process to sell certain
noncore U.S. assets. Barrick has raised $2.45 billion through asset
sales, joint ventures and streaming deals, for a total of $2.7
billion, it said. Among those deals was last week's sale of a 50%
stake in the company's Zaldivar copper mine in Chile for $1
billion.
Citing the potential for weaker gold prices in the second half,
Barrick said it is aiming to cut expenditures by $2 billion across
the company by the end of 2016. It said the reduction will come
from operating expenses, capital spending and corporate overhead.
It said it has identified $1.4 billion in "potential opportunities"
to date.
Gold production in the quarter fell to 1.45 million ounces from
1.49 million ounces, while all-in sustaining costs came in at $895
an ounce, up from $865 a year earlier.
The company trimmed its gold-production guidance for the year,
citing asset sales. It now expects gold production of between 6.1
million and 6.4 million ounces, compared with its previous view of
between 6.2 million and 6.6 million ounces. It also lowered its
cost guidance for the year, putting all-in sustaining costs at
between $840 and $880 an ounce, down from $860 to $895
previously.
It also cut its capital-spending plans for 2015 to between $1.6
billion and $1.9 billion, down 20% from a year earlier.
Barrick cut its quarterly payout to 2 cents a share from 5
cents.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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