Barrick Gold reported weaker-than-expected quarterly earnings on Monday and also slashed its forecast for output and hiked costs at its gold mine in Argentina, where cyanide solution spilled recently for the third time in 18 months.
Barrick, which is the world's largest gold miner, also lowered its forecast for 2017 group gold production largely because of the sale of a 50 per cent stake in the Argentinian mine, Veladero, to a Chinese miner last month.
Its shares fell more than 3 per cent after hours.
Barrick said it expects normal operations to resume at Veladero in June, pending government approval and the lifting of judicial restrictions.
Argentine regulators suspended the addition of cyanide to Veladero's leach pad processing operation and told Barrick to overhaul environmental practices and operations at the mine following the March 28 spill.
The June date was based on its "assessment of the time required to complete the proposed modifications to the leach pad," Barrick said in a statement.
Barrick said it now expects full-year production at Veladero of 630,000 to 730,000 ounces of gold, at all-in sustaining costs of $890 to $990 per ounce.
That is 12 per cent to 18 per cent down from Barrick's previous forecast of 770,000 to 830,000 ounces. It had previously expected mine costs of $840 to $940 per ounce.
Until now Barrick had said it does not expect a material impact from the spill to its 2017 Veladero forecasts.
Veladero is Argentina's largest gold mine and Barrick's third largest contributor to output.
Barrick said April 5 that China's Shandong Gold Mining Co would pay $960-million for 50 per cent of Veladero, which is one of Barrick's five core mines.
Largely due to the sale, Barrick now expects to produce between 5.3 million and 5.6 million ounces of gold in 2017 across the group, down from an earlier forecast of 5.6 million to 5.9 million ounces. Group cost forecasts remain unchanged.
Barrick and Shandong had a $500-million improvement plan for Veladero, Barrick Chief Operating Officer Richard Williams said on Friday after meeting Argentinian government officials. Argentina's Energy and Mining Minister said analyzing the plan would take about two weeks.
Barrick reported group adjusted earnings of $162-million, or 14 cents a share, in the first quarter. That was up from $127-million, or 11 cents a share, in the same period last year but below analysts' forecasts of 20 cents per share, partly because costs rose.