TORONTO (miningweekly.com) – The world’s most prolific gold producer, Barrick Gold, on Thursday posted a second-quarter loss as it booked a significant charge on lower metal prices, and slashed its dividend to conserve cash.

For the three months ended June 30, Barrick reported a net loss of $8.56-billion, or $8.55 a share, reflecting $8.7-billion in after-tax impairment charges, mainly driven by significant decreases in long-term metal price assumptions following the sharp declines in spot gold prices in the period.

The total charge was made up of $5.1-billion for the Pascua-Lama project straddling the Chile/Argentine border, $2.3-billion in goodwill impairments and $1.3-billion in other asset impairment charges.

In the same period of 2012, the company reported a profit of $787-million, or $0.79 a share. Adjusted to exclude special items, second-quarter net earnings were $0.66 a share, topping analysts' average estimate of $0.56 a share.

Revenues were down 1.3% at $3.2-billion.

Gold output totalled 1.81-million ounces, up 4% on the 1.74-million ounces a year earlier.

Barrick said the bulk of its expected 2013 gold output was produced at all-in sustaining costs “well below” current spot levels, adding that for those operations that were not generating positive cash flow, it would change mine plans, suspend, close or divest them.

“We are disappointed with the impairment charges for Pascua-Lama and other assets, but we are confident that these assets, some with mine lives in excess of 25 years, will generate substantially more economic benefits over time,” president and CEO Jamie Sokalsky said during an analysts’ telephone call.

Gold prices have fallen sharply from the start of the year, hitting a near three-year low at about $1 180/oz in late June. This was prompting miners across the globe to cut spending, adjust plans and defer or divest projects as they struggle to adapt to a low-price environment.

On Wednesday, Kinross Gold reported its third write down in a year and a half, this time worth $2.4-billion, bringing the total impairments to $8-billion, more than its $6.1-billion market value. Goldcorp also recently wrote off $2-billion, and in the past few months Australia’s Newcrest Mining booked a A$6-billion charge stemming from its troubled $9.7-billion acquisition of Lihir Gold three years ago.

Barrick was coming to terms with slowing construction at its Pascua-Lama gold project, as it looked to rein in spending on the severely delayed project, already billions of dollars over budget. Construction was partially halted earlier this year after a Chilean court ordered a suspension to weigh claims by indigenous communities that development work had damaged glaciers and harmed water supplies.

The company said resequencing of the project would result in a significant deferral of planned capital spending in 2013 and 2014. Barrick reduced capital expenditures on the project by a total of $1.5-billion to $1.8-billion.

The company also reduced its total capital guidance to between $4.5-billion and $5-billion, down from a range of between $5.7-billion and $6.3-billion.

The company lowered its cost forecast for both copper and gold production this year, saying it now expected its average all-in sustaining costs to be between $900/oz and $975/oz of gold.

The miner said it had revised its internal price assumptions for impairment testing to $1 300/oz for gold, $23/oz for silver and $3.25/lb for copper.

Further, in a step to conserve cash, Barrick lowered its quarterly dividend to $0.05 a share from the $0.20 a share previously, which was expected to save about $600-million a year.

“We recognise the importance of dividends to our shareholders, and it is our goal to return more capital to investors in the future, but at this time, this is the prudent course of action,” Sokalsky said.

As a result of the delay at its Pascua-Lama mine, changes to other mine plans and the likelihood of further asset sales, Barrick no longer expected to produce eight-million ounces of gold a year by 2016.

At the end of the quarter, the company had about $2.4-billion cash in the bank.

After initially falling as low as C$17.52 on Thursday morning, Barrick’s TSX-listed stock regained some ground to C$17.75 a share in morning trade.