The world’s biggest gold miner in terms of market capitalization, which recently merged with Homestake Mining, also said it will adopt U.S. Generally Accepted Accounting Principles. As a result, its earnings for the first nine months of 2001 fall to US$190 million (or 35 per share) from the previously reported US$204 million (52 per share), whereas operating cash flow rises to US$538 million from US$420 million. Both figures are based on 536 million shares outstanding, against 396 million shares prior to the merger.
During 2000, Barrick produced 3.7 million oz. at a total cash cost of US$145 per oz. The company posted a net loss of US$776 million for the year (net earnings of US$334 million before the writedowns).
The new accounting procedures will result in a US$117-million charge related to the Homestake merger.
Barrick will also take a pretax fourth-quarter provision of US$59 million related to the court judgment in the litigation between Homestake and
A British Columbia court awarded $88.2 million to Inmet for breach of contract in the aborted sale of the Troilus gold mine in north-central Quebec. The decision went against Homestake Canada, now a wholly owned subsidiary of Barrick.
Madam Justice Deborah Satanove of the B.C. Supreme Court found that Inmet was entitled, under law, to specific performance of the contract but instead awarded equitable damages. The amount of damages is the difference between the $178-million price set in the original deal and a $90-million estimate of the mine’s value at the time of trial.
The judge’s decision was based on Homestake’s contention that the assay data Inmet had provided were inaccurate and unreliable. “The preponderance of evidence indicates that it is more likely than not that [Inmet’s] database was sufficiently accurate to be reliable,” Madam Justice Satanove wrote in her decision.
Barrick is considering appealing the ruling.
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