Barrick Gold Q4 Loss Narrows, Sees Lower Output In 2014

(RTTNews) - Canadian gold producer Barrick Gold Corp. (ABX, ABX.TO) on Thursday reported a loss for the fourth quarter that narrowed from last year on fewer one-time charges, offsetting a decline in revenues amid lower gold production as well as lower prices.

In addition, Barrick slashed its gold reserves by 26 percent. The company also projects lower copper and gold production as well as lower capital expenditure for 2014.

Net loss attributable to equity holders of Barrick for the fourth quarter narrowed to $2.83 billion or $2.61 per share from $3.01 billion or $3.01 per share in the year-ago period.

The latest quarter's results included $2.82 billion in impairment charges, primarily related to Pascua-Lama, Porgera, Veladero and the Australia Pacific gold segment; and $176 million in suspension-related costs at Pascua-Lama.

The prior-year quarter's results included an after-tax impairment charge of $4.2 billion, primarily related to the company's copper business unit.

Adjusted net earnings for the quarter were $0.37 per basic share, compared to $1.16 per basic share in the prior year. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that the latest quarter's results reflect lower realized gold and copper prices as well as a decline in gold and copper sales volumes.

Revenues for the quarter declined 29 percent to $2.93 billion from $4.15 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $2.84 billion for the quarter.

Gold production for the quarter declined 15 percent to 1.71 million ounces from 2.02 million ounces in the prior-year period. Gold sold was 1.83 million ounces, compared to 2.03 million ounces last year, while average realized gold price declined 26 percent to $1,272 per ounce.

Copper production for the quarter advanced 7 percent to 139 millions pounds from 130 millions pounds in the year-ago period. Copper sold decreased 13 percent from the prior-year period to 134 million pounds, while average realized copper price declined 6 percent to $3.34 per pound.

For fiscal 2013, Barrick reported net loss attributable to equity holders of $10.37 billion or $10.14 per share, wider than loss of $538 million or $0.54 per share in the previous year. Adjusted net earnings for the year were $2.51 per basic share, compared to $3.95 per basic share in the prior year.

Revenues for the year declined 13 percent to $12.51 billion from $14.39 billion last year.

Street expected the company to earn $2.52 per share for the year on revenues of $12.42 billion.

Barrick said its gold reserves at the end of 2013 fell 26 percent to 104.1 million ounces from 140.2 million ounces a year earlier. The company calculated its reserves for the year using a gold price assumption of $1,100 an ounce, which the company noted, was well below the $1,500 an ounce used in 2012.

Barrick said, "While this is well below the company's outlook for the gold price and below current spot prices, it reflects Barrick's focus on producing profitable ounces with a solid rate of return and the ability to generate free cash flow."

Looking ahead to 2014, Barrick forecasts gold production of 6 million to 6.5 million ounces, down from the company's 2013 production of 7.17 million ounces.

Barrick also projects full-year company-wide copper production of 470 million to 500 million pounds, down from the production of 539 million pounds in 2013.

The company forecasts capital expenditures for the year of $52.40 billion to $2.70 billion, down from capital expenditures of $5.0 billion in the previous year.

During the fourth quarter of 2013, Barrick temporarily suspended construction at its Pascua-Lama project, except for those activities required for environmental and regulatory compliance. The company noted that ramp-down is on schedule for completion by mid-2014.

Barrick Gold expects to incur costs of about $300 million this year for the ramp-down as well as environmental and social obligations. Further, the company said that a decision to restart development will depend on improved economics and reduced uncertainty related to legal and regulatory requirements.

In Thursday's regular session on the NYSE, ABX is trading at $19.37, up $0.40 or 2.11 percent on a volume of 608,720 shares.