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About a month after announcing its biggest takeover in seven years, Barrick Gold Corp. has announced a hefty write-down on a South American mine and says its full-year gold production will likely be on the lower end of its forecast.
In a release after trading closed on Wednesday, Barrick said it lost US$412-million in the third quarter, driven in large measure by a US$405-million impairment charge at its Lugunas Norte mine in Peru.
Barrick said it had studied whether it could profitably process “refractory” ore, which is a difficult to handle sulphide-rich rock, at Lagunas Norte, but concluded it wasn’t feasible for the time being. In an e-mail, Barrick spokesman Andy Lloyd said it could still be an option at some point in the future.
Toronto-based Barrick produced 1.25 million ounces of gold in the quarter and said that its full-year production will be at the lower end of its predicted range of 4.5 million to 5 million ounces.
On an adjusted basis, Barrick made 8 U.S. cents a share, 3 U.S. cents better than analysts surveyed by Thomson Reuters were expecting. Barrick generated US$319-million in free cash flow, 42 per cent higher than in the same quarter last year and materially higher than the US$118-million analysts were expecting.
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