NEW YORK Barrick Gold Corp. posted a net loss of just over $3 billion in the fourth quarter in contrast to net income of $959 million in the same period a year earlier despite an 11.4-percent increase in sales to $4.19 billion.
The Toronto-based company attributed the loss in large part to an after-tax impairment charge of $4.2 billion primarily related to its copper business.
Barrick recorded a total after-tax asset and goodwill impairment charge of $3.8 billion for the copper division in the fourth quarter as the "new life-of-mine model for Lumwana (Zambia) reflects higher operating and sustaining capital costs and reduced profitability." Those higher-than-anticipated costs pushed the company to curtail expansion plans at Lumwana, Barrick said.
For the full year, Barrick posted a net loss of $665 million vs. net income of more than $4.48 billion in 2011 on sales that rose 2.2 percent to nearly $14.55 billion.
The company produced 468 million pounds of copper and 7.42 million ounces of gold last year.
"Rising costs, poor capital allocation and the pursuit of production growth at any cost in the industry have led to declining equity valuations across the sector," president and chief executive officer Jamie Sokalsky said in a statement. "The message is clear: the industry must chart a new path forward."
The company is "increasingly taking strong action" and will refocus its business on the principle that "returns will drive production; production will not drive returns," Sokalsky said.
Barrick does not have any plans to build new mines, for example. "We have a number of world-class ore bodies around the world which hold sizeable economic potential but which currently do not meet our investment criteria," the company said. "In todays challenging environment, Barrick has no plans to build any new mines."
Barrick forecast that copper production will total between 480 million and 540 million pounds this year, while gold output will total 7 million to 7.4 million ounces.