Barrick Gold Earnings Trail Estimates as Output Declines

Barrick Gold Corp., the world’s largest producer of the metal by sales, reported fourth-quarter earnings that trailed analysts’ estimates as output declined and gold prices fell.

The company had a net loss of $2.83 billion, or $2.61 a share, compared with a loss of $3.01 billion, or $3.01, a year earlier, the Toronto-based company said today in a statement. Earnings excluding $2.82 billion of writedowns and other one-time items were 37 cents a share, missing the 41-cent average of 22 estimates compiled by Bloomberg. Sales fell to $2.93 billion from $4.15 billion, beating the $2.84 billion average estimate.

Barrick is among gold miners cutting spending, selling assets and reworking mine plans to lower costs and focus on the most profitable production. Gold futures dropped 28 percent in 2013, the most since 1981, helping spur at least $26 billion of writedowns by the world’s biggest producers.

Barrick fell 3.5 percent to C$20.81 yesterday in Toronto. The shares have climbed 11 percent this year.

Barrick reported fourth-quarter gold production of 1.71 ounces, compared with 2.02 million ounces a year earlier. The company’s adjusted operating cost to produce an ounce of gold was $573 per ounce, compared with $547 a year earlier.

Gold averaged $1,273.43 an ounce on the Comex in New York in the fourth quarter, 26 percent less than a year earlier and 4.1 percent lower than the third quarter.

Asset Sales

Barrick has agreed to sell more than $850 million of assets in the past seven months, including its oil and gas unit, five Australian mines and a minority interest in a Nevada gold operation. The company also suspended construction of its delayed and overbudget Pascua-Lama project in the Andes, started closing its Pierina mine in Peru last year and cut its dividend 75 percent.

The company’s gold reserves at the end of 2013 fell to 104.1 million ounces following the sales and after Barrick lowered its long-term price assumption to $1,100 an ounce. The previous estimate of 140 million ounces was based mostly on a price of $1,500.

Reserves are estimates of how much of the metal in the ground can be profitably mined given certain price and other assumptions.

(Barrick scheduled a conference call to discuss the results at 9:30 a.m. New York time, accessible in North America at 1-888-789-9572 and for other callers at 1-416-695-7806. The passcode is 6772992)

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