Gold continued to lose its shine in 2013, with the top 3 miners registering a combined loss of $16 billion. The loss of Barrick Gold, Goldcorp and Kinross Gold Corp are due to lower price of the once-safe haven and the drop in value of bullion and mining shareprices.
Gold prices to swing next week ahead of US Federal Reserve QE taper decision (Reuters).
Jamie Sokalsky, chief executive of Barrick, reported on Thursday at $10.5 billion net loss, making it the most difficult year in the miner's 30-year history. As a result, Barrick had to revamp its board, sell expensive mines, stop key projects and cut its debt while calming angry shareholders.
The miners also had to eliminate production that is more expensive than spot gold prices even as no clarity looms if the yellow metal would rise above $1,300.
"It's a culture of not just chasing ounces and producing ounces for the sake of it ... It's a shift in culture in the mining industry in general, not just at Barrick," Mr Sokalsky said, quoted by Globe and Mail.
In the case of Barrick, it also took $11.5 billion impairment charges in 2013, including the release of $6 billion of its South American Pascua Lama project which suffered an indefinite suspension over skyrocketing costs and delays.
Barrick has also written down over $6 billion in 2011 used to purchase copper firm Equinox Minerals, almost wrecking the company's balance sheet.
With these slow down, Barrick said that for 2014, it would produce between six and 6.5 million ounces of gold, lower than the 7.16 million tonnes it produced last year, and much lower than the $9 million initial production target of the miner. Barrick, however forecasts higher production cost of gold between $920 and $980 till the end of 2014 from the 2013 average of $915.
In turn, competitor Newmont Mining predicts production of 5 million ounces.
But in spite of the negative headline numbers, investors said they are encouraged by the earnings which are indicators of progress.