Barrick profit drops on lower gold sales, higher costs

Workers stand next to an open pit at Barrick Gold Corp's Veladero gold mine in San Juan province, Argentina April 26, 2017. REUTERS/Marcos Brindicci

TORONTO (Reuters) - Canada's Barrick Gold Corp ABX.TOABX.N reported a weaker-than-expected second-quarter adjusted profit on Wednesday, hurt primarily by lower gold sales, along with higher maintenance and fuel costs.

Barrick maintained its full-year forecast to produce 4.5 million to 5 million ounces of gold, positioning the company to lose its title of world's biggest gold producer this year to Newmont Mining Corp NEM.N, which targets 4.9 million to 5.4 million ounces of gold.

In an industry under increasing pressure to grow, Barrick announced a high-grade discovery at Fourmile, in its Cortez district in Nevada, where it will spend another $10 million on exploration this year. Expansion projects in Nevada and the Dominican Republic were on schedule and budget, it added.

The company said it eliminated some positions and closed small offices in the quarter and expects savings to offset approximately $30 million in severance costs.

Barrick said adjusted net earnings for the quarter ended June 30 fell to $81 million, or 7 cents a share, compared with $261 million, or 22 cents a share in the same period a year ago. That lagged the 11 cent per share profit that analysts, on average, had expected, according to Thomson Reuters I/B/E/S.

On a net basis, Barrick lost $94 million, or 8 cents a share.

Revenue of $1.7 billion matched expectations.

Second-quarter gold production of 1.07 million ounces was down from 1.4 million ounces in the same period last year, while copper production dropped to 83 million pounds from 104 million.

All-in sustaining production costs, a key industry measure, rose to $856 per ounce of gold from $710 an ounce in the year-prior period. Copper costs rose to $3.04 a pound from $2.38 a pound.

Reporting by Susan Taylor; editing by Diane Craft and Dan Grebler