Boston, MA 10/30/2013 (wallstreetpr) – Barrick Gold Corporation (USA) (NYSE:ABX) arguably one of the largest gold mining companies in the world too struggles with issues common to the gold mining industry – unprofitable gold mines.
Prices have fallen from the historic $1920 per ounce in September 2011. This has affected the output prices of mining companies such as Barrick Gold. It has affected their revenues and drop in share prices resulting in loss of market capitalization: Barrick Gold’s loss in the past two years is 61% against Anglogold Ashanti loss of 68%, Newmont Mining’s loss of 57% and GoldCorp losing 46%.
This has led to most of the mining companies to drop expansion plans as the price of gold has led to rendered most mines unprofitable.
For Barrick Gold Corporation, the focus has been on lowering its operational costs and shutting down mines that are no longer profitable to the company.
Barrick Gold mines across several continents – from Tanzania to Peru and across the Australian continent. Barrick Gold’s restructuring has led to the company selling its Australian mines, cutting administrative staff at its headquarters to just one-third the original numbers, besides cutting back on its capital funds for the year by nearly $2 billion. The company continues to relook its other mines and may sell or close them on a need basis to ensure that its largest as well as the least-cost mines remains operational. In September 2013, Barrick Gold reconsidered divesting nearly 74% stake in African Barrick, but is committed to selling only if the price is right. Other Australian mines on the selling-list include Kanowna Belle and Plutonic, located in Western Australia.
Both these mines are cost-intensive sites and offer short-life assets, according to the company. If sales of these are effective, then Barrick would hold only two more mines in Australia, owning about 7 million gold reserves.
Barrick Gold continues to be optimistic about reopening its Pascua- Lama in Chile.
