Barrick Gold posts $3-bn loss on copper mine write-down

Canada's Barrick Gold Corp, the world's biggest gold miner, reported a net loss of $3.1 billion in the fourth quarter on a massive write-down of $4.2 billion related to its Zambian copper mine Lumwana, which the company acquired in 2011.

Toronto-based Barrick said that the company will make major changes in its business model with stricter, more disciplined capital allocation and would slash its previously budgeted expenditure plans by $4 billion. 

Barrick's president and chief executive officer Jamie Sokalsky said, "Investors are rightfully demanding fundamental change in the gold industry, and Barrick is driving this new paradigm."

The company does not plan to build any new mines or proceed with the expansion plans that were previously under consideration, and intends to spend only minimum capital to maintain its potential assets.

"Rising costs, poor capital allocation and the pursuit of production growth at any cost in the industry have led to declining equity valuations across the sector," Sokalsky said.

"Barrick highlighted the need for change last year and we are increasingly taking strong action and re-focusing our business based on the principle that returns will drive production, production will not drive returns," he further stated.