The world's largest gold miner, Barrick Gold Corp., considers a writedown of about US$5.5 billion on its Pascua-Lama venture in the Andes. The element's worth shrunk to a three-year low which accounts for the corporation's decision.
Yesterday, the Toronto-based firm stated that Barrick would probably assume some relevant impairment charges for the following quarter while it reviews goodwill and other assets.
Jefferies analyst, Jake Greenberg, said on June 19 that a "storm of writedowns" was approaching from the gold mining industry. Since August 2010, New York's gold futures had plunged 27% and dropped below US$1,200 per ounce.
Barrick added it plans to rearrange its progress in Pascua-Lama. It articulated that staffing levels would be lessened due to the construction that was anticipated to take a longer time.
The company supposed a US$1.5 billion to US$1.8 billion reduction on the expenditures within two years.
In the first five years of operations, Pascua-Lama was expected to make an average of 800,000 to 850,000 ounces per year.
Jamie Sokalsky, Chief Executive Officer, stated that the mine has "significant and strategic value for Barrick shareholders."
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