Barrick Sees Up to $3 Billion in Impairments on Lower Gold – by Danielle Bochove (Bloomberg News – January 22, 2016)

http://www.bloomberg.com/

Barrick Gold Corp., the world’s largest producer of the metal, said it may book as much as $3 billion in impairment charges as a prolonged gold slump forces it to revise its price assumptions for 2016.

A preliminary review shows potential goodwill impairment charges of about $1.8 billion, and asset impairment charges in the range of $1 billion to $1.2 billion, the Toronto-based company said Thursday in a statement. The asset impairments are primarily related to the stalled Pascua-Lama project on the Chile-Argentina border and the Pueblo Viejo mine in the Dominican Republic.

The company lowered its gold price assumption to $1,000 an ounce for 2016 and to $1,200 long term.

“In line with our objective of generating positive returns in virtually any foreseeable gold price environment, we have decided to use pricing for our impairment testing that is prudent in current market conditions,” Barrick President Kelvin Dushnisky said in the statement.

In 2015, Barrick had used $1,250 an ounce as its short-term gold price assumption in impairment tests and $1,300 for the long term, spokesman Andy Lloyd said in a phone interview from Toronto.

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-01-21/barrick-may-see-impairment-charges-of-as-much-as-3-billion

Comments are closed.