Barrick Gold Corporation (ABX - Free Report) has announced that it is halting construction work at the Pascua-Lama mine in Chile after a Chilean court issued a preliminary injunction citing environmental concerns.
Barrick’s Pascua-Lama mine overlaps the border of Chile and Argentina and the court ruled in favor of indigenous communities who complained that the project threatens their water supply.
Construction activities in Argentina, where the majority of Pascua-Lama's critical infrastructure is located, will not be affected. Barrick also said that it is currently working to address the environmental and other regulatory issues as required by the Chilean authorities.
Barrick’s shares fell roughly 8.4% to close at $24.46 yesterday.
Barrick, which is one of the prominent gold mining companies along with Newmont Mining Corporation (NEM - Free Report) , AngloGold Ashanti Limited (AU - Free Report) and Kinross Gold Corporation (KGC - Free Report) , released its fourth quarter 2012 results in Feb 2012. Barrick’s adjusted earnings (excluding one-time items) fell to $1.11 per share in the fourth quarter from $1.17 per share in the year-ago quarter, but exceeded the Zacks Consensus Estimate of $1.09.
On a reported basis, Barrick slipped to a loss of $3.06 billion or $3.06 per share compared with profit of $0.96 billion or 96 cents per share in the year-ago quarter. The bottom line was hit by tax impairment charges of $4.2 billion, mainly related to the company’s copper business.
Barrick’s revenues jumped 11.4% year over year to $4,189 million in the reported quarter and exceeded the Zacks Consensus Estimate of $4,044 million. Average realized price of gold increased 3% year over year to $1,714 per ounce. C1 cash cost of copper increased 5.6% year over year to $2.07 per pound.
Barrick expects to produce 7–7.4 million ounces of gold in 2013 at total cash costs of $610-$660 per ounce. Copper production in 2013 is expected to increase to 480-540 million pounds, primarily reflecting improved production from Lumwana. Total C1 cash costs are expected to be in the range of $2.10-$2.30 per pound.
Currently, Barrick retains a Zacks Rank #3 (Hold).