Barrick Gold reports fourth-quarter loss as restructuring well underway
A logo for the Barrick Gold Corporation is seen in Toronto on Tuesday, April 28, 2015. (THE CANADIAN PRESS / Nathan Denette)
TORONTO -- The new head of Barrick Gold Corp. says he has moved swiftly to restructure the company following its takeover of Africa-focused Randgold Resources and makes no apologies for cutting the company's Canadian footprint.
"The corporate office and its satellites have been restructured, to move people and functions -- such as the innovation and digital departments -- out of the back rooms and into the operations where they belong," said CEO Mark Bristow, who previously led Randgold, on an earnings call Wednesday.
"So, you know, those short little hysterical cries about us closing down stuff is unfounded. We really put people back to where they're supposed to be to ensure that we do lead properly in the mining industry."
The company has come under criticism for cutting about 100 staff at its Toronto head office, which now stands at about 70 employees, while also reducing the number of Canadian directors on the board to one.
Bristow has pushed forward the decentralized management structure he used at Randgold to Barrick's global scale. He said he's been busy touring the company's key assets and meeting with local management and politicians.
"The only reason that you don't find me in an office in Toronto every day is because it's much more important and a lot more fun being in the operations," said Bristow.
He said Barrick is underweighted in its Canadian assets, with Hemlo in northern Ontario its only operation in the country, but that it's hard to find the right opportunities in Canada.
The company is looking to improve its early-stage exploration program that could include Canada, but Bristow said it is unwise to rush into any purchases.
"It's going to take me a little while to become Canadian. I'm working hard at it."
The focus going forward will be on prioritizing its top tier assets as it works to boost efficiencies and reduce costs, said Bristow.
Costs will, however, rise this year as Barrick winds down production at its higher-grade, low-cost Cortez Hills open pit. It said higher grades and improved efficiencies are expected to reverse an upward cost trend over the next two to three years.
For the year ahead, Barrick expects to produce between 5.1 and 5.6 million ounces of gold at an all-in sustaining cost of US$806 per ounce, and between 375 and 430 million pounds of copper at an all-in sustaining cost of US$2.82 per pound.
The push for improved operations comes as the company, which keeps its books in U.S. dollars, reported a loss of $1.2 billion or $1.02 per share for the quarter ended Dec. 31 compared with a loss of $314 million or 27 cents per share in the same period a year earlier.
The loss included $900 million in net impairment charges primarily related to the Lagunas Notre mine in Peru, where the company saw lower throughput, and at its Veladero mine in Argentina, where it dealt with higher government taxes.
On an adjusted basis, Barrick says it earned six cents per share in the quarter, down from an adjusted profit of 22 cents per share a year earlier. Analysts on average had expected an adjusted profit of five cents per share for the quarter, according to Thomson Reuters Eikon.
The company's shares were trading down about 3.7 per cent at $17.05 in early trading on the Toronto Stock Exchange.