Barrick Gold Corp. met lowered third-quarter guidance Thursday, posting earnings that dropped amid a decrease in production and higher costs.
For the quarter ended Sept. 30, Toronto-based Barrick reported earnings of $34-million (U.S.) or 6 cents a share, down from $59-million or 11 cents in the same period a year earlier.
Operating cash flow was $156-million in the most recent quarter, down from $181-million last year.
Late last month, Barrick caught investors by surprise, slashing its profit outlook for 2002 because of lower production and higher costs at several of its mines around the world.
At that time, Barrick revised down its earnings forecast for the third quarter to between 5 cents and 6 cents. For the year it forecast earnings of between 33 cents and 35 cents.
Analysts polled by Thomson Financial/First Call were forecasting earnings on average in the third quarter of 6 cents a share.
"A variety of unrelated operating issues from first half 2002 proved more stubborn than we'd expected and resulted in a disappointing quarter," Barrick's president and chief executive officer Randall Oliphant said.
"But we've got the issues in hand, we've got our focus on change, and we've got a plan in place to make changes happen. These issues in no way detract from the fundamental quality of our asset base — or the growth pipeline we have in place."
During the quarter, Barrick said gold production from its operating mines in Canada, Australia, Tanzania and Chile totalled 1.38 million ounces at a cash cost of $180 per ounce in the third quarter, generating cash margins of $162 an ounce.
For the full year, Barrick said it continues to expect to produce 5.7 million ounces of gold, at an average cash cost of $178 per ounce. Barrick also said it sees full-year 2002 earnings in the range of 33 cents to 35 cents a share based on spot gold prices averaging $315 per ounce for the balance of the year.
The company also recently announced plans to add four mines in five years, with a total of two million ounces of new production at an average cash cost of $125 per ounce over the first 10 years of production.
© The Globe and Mail
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