Barrick shares tumble as gold miner sounds cautious tone – by Josh O’Kane (Globe and Mail – April 26, 2017)

Barrick Gold Corp. shares slid 11 per cent Tuesday as investors reacted to the gold miner’s first-quarter results, which missed production and earnings estimates and revealed higher operating costs.

The world’s largest gold producer late Monday reported first-quarter net income of $889-million (U.S.) and adjusted net earnings of $162-million, or 14 cents a share, versus the analyst consensus estimate of 20 cents a share.

At the company’s annual meeting Tuesday, president Kelvin Dushnisky highlighted Barrick’s new era of caution, including cost savings through new joint ventures and debt reduction – having paid down $178-million in the first quarter.

But the market instead focused on Barrick’s lowered production forecast for the current year – 5.3 million to 5.6 million ounces, down from the original 5.6 million to 5.9 million range – partly as a result of selling half its stake in the Veladero mine to Shandong Gold Group Co. Ltd. The mine is facing delays after a March cyanide-solution spill, the site’s third in 18 months.

Federal and provincial authorities in Argentina are reviewing a new plan for the mine’s operations, which would come at a preliminary cost of $500-million. That includes the estimated capital to sustain operations over five years, and includes planned expansion and other funding, a spokesperson said. Shares fell $2.82 to $22.89 on the Toronto Stock Exchange Tuesday. Barrick spent 2016 rebuilding after being bitten by the commodities slump and ill-fated acquisition spending.

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