Barrick Gold Corp. took a $500-million charge on its Saudi Arabian copper project and appointed two more independent directors, including a former Goldman Sachs banker who used to work closely with the company’s new chairman John Thornton.
The Toronto-based company, the world’s largest gold producer, announced the new directors as it reported a smaller loss in the second quarter, a sign that the gold giant’s financial discipline is starting to pay off.
For the quarter, Barrick lost $269-million (U.S.), or 23 cents per share, compared with a staggering loss of $8.6-billion or $8.55 per share in the year-earlier period.
In response to the sharp drop in bullion prices last year, Barrick shelved expensive gold projects, sold or revamped costly mines and started focusing on its best performing assets in Nevada and the Americas.
This is the second consecutive quarter where Barrick spent less than $900 to produce an ounce of gold, which prompted the company to reduce its annual production costs.
With the precious metal trading below $1,300 an ounce, it is critical for Barrick and other gold producers to keep production costs well below that level.
“The commitment by our mine managers to cost reduction and capital efficiency has allowed us to lower our mid-year operating and capital cost guidance for the second year in a row,” Barrick CEO Jamie Sokalsky said in some of his last remarks before he is due to step down mid-September.
Mr. Sokalsky is departing after Mr. Thornton killed the CEO position and replaced him with two co-presidents and an elevated chief financial officer.
Barrick’s board appointed J. Michael Evans, former vice chairman of Goldman Sachs and Brian Greenspun, former chairman of Greenspun Media Group.