Barrick stock falters after S&P downgrades over Pascua-Lama 'execution risks'
Ratings agency Standard & Poor's has downgraded Barrick Gold blaming higher forecast capital spending and "execution risks surrounding Pascua-Lama", the world number one miner's flagship new project.
Barrick's shares fell sharply at the open Wednesday on the news that the company now attracts a BBB+ with a negative outlook versus A– before and general weakness in the gold sector. After slumping to $31.58, the $32.2 billion counter recovered to $32.15 or 2.2% down by mid-morning in heavy volumes.
Barrick announced last week a 50-60% cost blow-out for the copper-gold-silver project straddling the Chile–Argentina border which could end up with a final bill of as much as $8 billion with $3 billion already spent. Initial production at Pascua-Lama has also been delayed by at least a year.