Barrick shares hammered after slashing production guidance
Shares in Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) were marked down in after hours trade on Monday after the company reported first quarter results that came in below expectations and slashed its outlook for the year.
In late dealings Barrick fell 3.6% after reporting earnings per share of $0.14 and revenues of $1.99 billion, both measures missing analysts forecasts. The Toronto-based company is now worth $22.2 billion in New York.
Barricks' full-year gold production is now expected to be 5.3–5.6 million ounces
Barrick produced 1.31 million ounces of gold in the first quarter at a cost of sales of $833 per ounce, up from 1.28 million ounces at a cost of sales of $810 per ounce in the prior-year period. All in costs rose nearly 10% to $772 from the same period last year.
Barrick, the world's largest gold miner in terms of output, slashed its guidance for the year due to ongoing problems at its Veladero mine in Argentina. Barricks' full-year gold production is now expected to be 5.3–5.6 million ounces, down from its previous range of 5.6–5.9 million ounces.
The company also sold a 50% stake in Veladero for $960 million to China's Shandong Gold and the transaction constitutes roughly two-thirds of its lowered output guidance. Barrick expects normal operations at Veladero to resume in June pending government approval and the lifting of judicial restrictions imposed by the South American nation after a cyanide solution spill at the property.
It was a busy quarter for Barrick – the company also announced a new joint venture with Vancouver's Goldcorp at the Cerro Casale project in Chile, and a new exploration partnership in Canada's Yukon territory with ATAC Resources and in Northern Quebec with Osisko Mining.