Barrick Gold suspends Pascua-Lama construction

|About: Barrick Gold Corporation (ABX)|By:, SA News Editor

In its Q3 earnings report, Barrick Gold (ABX) says it is temporarily suspending all construction activity at its Pascua-Lama project on the Chile-Argentina border.

The move allows ABX to conserve capital and reduce its capital spending guidance for 2014 by $1B, but it also throws the future of the $8.5B project into question.

The news overshadows otherwise better than expected earnings, gold production of 1.85M oz. at all-in cash costs of $916/oz. - in line with the prior quarter and among the lowest costs in the industry - and a promise of another $500M in annual savings by developing a “flatter operating model.”

Gold production for the full year is seen near the low end of its prior guidance of 7M-7.4M oz., but copper production guidance is raised to 520M-550M lbs. from 500M-540M due to improvements at its Lumwana mine in Zambia.

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