(Adds stock move, Argentina mine details and sale)
By Nicole Mordant
April 24 Barrick Gold reported
weaker-than-expected quarterly earnings on Monday and also
slashed its forecast for output and hiked costs at its gold mine
in Argentina, where cyanide solution spilled recently for the
third time in 18 months.
Barrick, which is the world's largest gold miner, also
lowered its forecast for 2017 group gold production largely
because of the sale of a 50 percent stake in the Argentinian
mine, Veladero, to a Chinese miner last month.
Its shares fell more than 3 percent after hours.
Barrick said it expects normal operations to resume at
Veladero in June, pending government approval and the lifting of
Argentine regulators suspended the addition of cyanide to
Veladero's leach pad processing operation and told Barrick to
overhaul environmental practices and operations at the mine
following the March 28 spill.
The June date was based on its "assessment of the time
required to complete the proposed modifications to the leach
pad," Barrick said in a statement.
Barrick said it now expects full-year production at Veladero
of 630,000 to 730,000 ounces of gold, at all-in sustaining costs
of $890 to $990 per ounce.
That is 12 percent to 18 percent down from Barrick's
previous forecast of 770,000 to 830,000 ounces. It had
previously expected mine costs of $840 to $940 per ounce.
Until now Barrick had said it does not expect a material
impact from the spill to its 2017 Veladero forecasts.
Veladero is Argentina's largest gold mine and Barrick's
third largest contributor to output.
Barrick said April 5 that China's Shandong Gold Mining Co
would pay $960 million for 50 percent of Veladero,
which is one of Barrick's five core mines.
Largely due to the sale, Barrick now expects to produce
between 5.3 million and 5.6 million ounces of gold in 2017
across the group, down from an earlier forecast of 5.6 million
to 5.9 million ounces. Group cost forecasts remain unchanged.
Barrick and Shandong had a $500 million improvement plan for
Veladero, Barrick Chief Operating Officer Richard Williams said
on Friday after meeting Argentinian government officials.
Argentina's Energy and Mining Minister said analyzing the plan
would take about two weeks.
Barrick reported group adjusted earnings of $162 million, or
14 cents a share, in the first quarter. That was up from $127
million, or 11 cents a share, in the same period last year but
below analysts' forecasts of 20 cents per share, partly because
(Reporting by Nicole Mordant in Vancouver; Editing by Bill
Trott and Chris Reese)