Barrick Gold Corporation (ABX - Analyst Report) declared that it has resumed normal operations at the Veladero mine in Argentina following approval from San Juan provincial authorities. Barrick had temporarily suspended operations at the Veladero mine from Sep 15, after it noticed that a pipe carrying process solution in the heap leach area was damaged when it was hit by a large block of ice that had rolled down the heap leach valley slope.
A small quantity of solution left the leach pad as a result of this incident. No solution from the damaged pipe reached any water diversion channels or watercourses. Extensive water monitoring in the area has confirmed the incident did not result in any environmental impacts.
The company has completed a number of remedial works required by provincial authorities geared to prevent such an incident from reoccurring, including increasing the height of the perimeter berms that surround the leach pad.
As normal operations resume, the miner will continue to assess the impact of the temporary suspension on Veladero's production for 2016. However, Barrick reiterates its total gold production for 2016 to be in the range of 5–5.5 million ounces at a cost of sales applicable to gold of $5.2–$5.5 billion and all-in sustaining costs of $750–$790 per ounce.
The company’s shares rose 3.4% to close at $15.98 on Oct 5.
Production at Veladero decreased 21% year over year to 119,000 ounces in second-quarter 2016 at an average all-in sustaining cost (AISC) of $744 per ounce. The lower production was primarily due to reduced tons placed on the leach pad and unexpected severe winter weather conditions. Barrick anticipates gold production at the mine to be in the range of 580,000 to 640,000 ounces in 2016.
Barrick Gold currently carries a Zacks Rank #1 (Strong Buy).
Stocks to Consider
Other well-ranked companies in the mining space include AngloGold Ashanti Ltd. (AU - Snapshot Report) , New Gold Inc. (NGD - Snapshot Report) both sporting a Zacks Rank #1 and Franco-Nevada Corporation (FNV - Snapshot Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AngloGold Ashanti has an expected earnings growth of 368% for the current year.
New Gold has an expected earnings growth of 491.7% for the current year.
Franco-Nevada has an expected earnings growth of 56.3% for the current year.
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