Barrick Gold Corp., the world’s biggest gold miner, may take a writedown of as much as $5.5 billion on its Pascua-Lama project in the Andes after the price of the metal plunged close to a three-year low.
Barrick is also likely to take other “significant” impairment charges for the second quarter as it reviews goodwill and other assets, the Toronto-based company said yesterday in a statement.
Barrick now expects first production from the mine on the Chile-Argentina border in mid-2016, compared with a previous target of the second half of 2014. It will provide an updated capital cost estimate during the third quarter, after finalizing a new construction schedule. Barrick raised the cost estimate twice last year to as much as $8.5 billion.
Gold futures in New York have plunged 27% this year and slipped below $1,200 an ounce on June 27 for the first time since August 2010. A “storm of writedowns” is coming from the gold mining industry, Jefferies analyst Jake Greenberg said in a June 19 note.