UPDATE: Barrick Gold Corp Shrs Down 7.5% In U.S. Pre-Market Trade On Q3 Miss, Production Cut, Higher Costs

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Barrick Gold Corp (ABX.TO) said third quarter net profit fell to $618 million or 62 cents per share, down from $1.37 billion or $1.37 per share a year earlier. On an adjusted basis, Barrick earned 85 cents per share, down from $1.38 per share, a year earlier. Analysts, on average, had expected earnings of 98 cents a share, according to Thomson Reuters I/B/E/S. It declared a quarterly dividend of US20 cents per share, payable on December 17, 2012 to shareholders of record at the close of business on November 30, 2012.

Revenue dropped 13.5% to $3.4 billion on lower gold sales and prices.

Operating cash flow of $1.73 billion and adjusted operating cash flow of $1.27 billion for the quarter compared to operating cash flow of $1.90 billion and adjusted operating cash flow of $2.00 billion, respectively, in the same prior year period.

2012 Outlook:

The company expects 2012 gold production of 7.3-7.5 million ounces, within the original guidance range of 7.3-7.8 million ounces. Total cash costs for gold are anticipated to be $575-$585 per ounce, compared to the previous guidance of $550-$575 per ounce, primarily due to higher cash costs from Australia Pacific and African Barrick Gold ( ABG ). Net cash costs are anticipated to be $480-$500 per ounce, within the previous guidance of $460-$500 per ounce.

Full year 2012 copper production is expected to be about 450 million pounds as a result of the delay in first production at Jabal Sayid in Saudi Arabia. C1 cash costs in 2012 are still anticipated to be $2.10-$2.30 per pound.

Pascua-Lama Project Update:

During the quarter, Barrick made substantial progress at Pascua-Lama. Along with construction advancement at site, the company strengthened the construction management team and hired Fluor to assume overall project management. Fluor is a global leader in construction of large mining projects, and the same firm that successfully managed construction of our recently completed Pueblo Viejo mine.

In July, the company announced preliminary results of a review indicating an increase in capital costs to $7.5-$8.0 billion and a delay in first production to mid-2014. Since then, Barrick has been working with Fluor on a more comprehensive top-to-bottom review. This review will be complete by our 2012 year-end results release; however, work to date suggests capital costs will be closer to $8.0-$8.5 billion, with first production in the second half of 2014.



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This article appears in: Investing , Commodities

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