​Barrick sees massive profit plummet

Barrick Gold has recorded a drop in net profit of 90% for its first quarter.

In its latest results the miner announced first quarter net earnings of $88 million, a massive fall from its previous corresponding period earnings of $847 million.

Taking in its adjusted net earnings, the miner still saw a 75% fall in earnings, dropping from $923 million last year to just $238 million for the first three months of 2014.

A major part of this was the fall in the gold price, from more than $1600 per ounce to just under $1300 per pound, which was coupled with a slight decline in production levels from 1.797 million ounces to 1.588 million ounces.

This was further compounded by a drop in copper prices as well as drop in production, falling from 127 million pounds to 104 million pounds year on year.

Despite this overall revenues only recorded a slight drip of just over 20%, as the miner slashed costs.

It also saw a positive financial position in terms of cash and non-cash working equivalents.

"Barrick is a considerably different company today than it was a year ago – leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of$833 per ounce,$100 per ounce below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results," Barrick's President and CEO, Jamie Sokalsky,said.

It also achieved this by divesting assets, such as the sell-off of its Kanowna Belle and Plutonic mines in Australia for $75 million earlier this year.

Cutting costs will remain a major focus.

It is also turning its sights towards Nevada, in the US, stating that it is considering a number of growth opportunities in the region.

“The company is evaluating a number of development options, including underground mining or a combination of both underground and open pit mining,” it said in a company statement. 

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.