Barrick swings to third-quarter net loss on Zaldivar charge

Barrick said it has reduced its debt load by 15 per cent in the first three quarters of the year, to $11.2 billion, as part of its effort to strengthen its balance sheet in the face of declining gold prices.

On Wednesday, Barrick Gold reported earnings of 11 cents a share for the third quarter, above analysts’ estimates of 7 cents a share for the quarter.

Revenues fell around 11.8% year over year to $2,315 million in the reported quarter and missed the Zacks Consensus Estimate of $2,353 million.

Barrick posted a net loss of $264 million, or 23 cents a share, including a $455 million impairment charge mostly related to reclassifying its Zaldivar mine as “held for sale”.

The gold mining company also announced that it is on track to achieve its $3 billion debt reduction target by the end of 2015. In July, the company sold a half stake in its Zaldivar copper mine in Chile to Antofagasta Plc for $1.01 billion.

Barrick said it plans to use about $1 billion of the proceeds from the ZaldÃvar sale, which is expected to close in the fourth quarter, to reduce debt.

The company reiterated its copper production guidance of 480-520 million pounds for 2015.

In addition to $2.46 billion in asset sales, joint ventures and partnerships, the company achieved $282 million in positive free cash flow in the last two quarters, the company said.

Barrick is rated at the lowest investment grade by Standard & Poor’s and Moody’s Investors Service, although both have stable outlooks on the miner.

Analysts had expected the company to earn $0.07 per share, according figures compiled by Thomson Reuters.

Production in the third quarter was in line with expectations at 1.66 million ounces of gold.

The Cortez mine produced 321,000 ounces of gold in the quarter, up 17.6% year over year, at an average all-in sustaining cost of $501 per ounce. The company tightened its gold production guidance range for 2015, from 6.1-6.4 million ounces to 6.1-6.3 million ounces, reflecting lower anticipated gold production from Acacia Mining.

All-in sustaining cost guidance for the year has been reduced to $830-$870 per ounce from the previous range of $840-$880 per ounce.

Barrick Gold Corp (ABX) released a profit for third quarter that dropped compared to the same period a year ago. Global callers dial 416-340-2217.