Barrick predicts higher costs in 2019 as it books a $1.2-billion quarterly loss – by Niall McGee (Globe and Mail – February 14, 2019)

Barrick Gold Corp. is predicting sharply higher costs and lower grades at a key mine, as well as lacklustre production for 2019, highlighting the challenges the company still faces after its takeover of Randgold Resources Ltd.

The Toronto-based miner, which closed its deal for Randgold on Jan. 1, also booked a fourth-quarter net loss of US$1.2-billion, as it incurred impairment charges at its Lagunas Norte and Veladero mines in Peru and Argentina, respectively.

The Randgold acquisition was designed in part to inject new management talent into Barrick after years of restructuring. New Barrick chief executive Mark Bristow, who came from Randgold, is considered within the industry to be skilled at trimming costs.

In the short term, however, Barrick said it expects its all-in sustaining costs (AISC) to rise to between US$870 and US$920 an ounce in 2019, compared with US$806 for last year, an increase of between 8 per cent and 14 per cent.

Barrick pinned the expected increases primarily on the transition from low-cost, open-pit mining to higher-cost underground mining at its big Cortez Hills facility in Nevada. Barrick also said that input costs, such as fuel, are also on the rise. The company’s production forecast for 2019 came in lower than expected and its capital cost estimates are higher than analysts predicted.

For the rest of this article:

Comments are closed.