TORONTO (miningweekly.com) – The world's largest gold miner Barrick Gold on Thursday reported a fourth-quarter net loss of $3.06-billion or $3.06 a share, including a $4.2-billion after-tax impairment charge mainly related to its copper business unit.

The company recorded a total after-tax asset and goodwill impairment charge of $3.8-billion for the copper business unit, as a new life-of-mine model for Lumwana, in Zambia, reflected higher operating and sustaining capital costs and reduced profitability.

Speaking during an analyst teleconference, CEO Jamie Sokalsky, who took over the helm from Aaron Regent last year, said the company would not proceed with an expansion at the mine, which had been underperforming since the company acquired it through a C$7.3-billion takeover of Equinox Minerals in 2011.

Significantly, Barrick said it would not proceed with any new mine construction this year as it focuses on completing the giant Pascua Lama mine straddling the Argentina/Chile border.

For the full year 2012, Barrick reported a net loss of $670-million or 66c a share, including after-tax impairment charges of $4.4-billion. The company also booked a $400-million impairment of the value of its oil and natural gas unit and the value of its investment in the Reko Diq project, in Pakistan.

However, the company’s TSX-listed stock remained buoyant during Thursday-morning trade, and rose by 4.63% to C$33.19 apiece on the TSX as the company’s earnings, with one-off items removed, beat analyst expectations.

Fourth-quarter adjusted net earnings were $1.11-billion or $1.11 a share, compared with $1.17-billion or $1.17 a share in the same period a year earlier. Analysts on average had expected adjusted earnings of $1.05 a share on revenue of $4.2-billion.

Fourth-quarter revenue rose by 11% to $4.19-billion on higher production and an improved gold price. Full-year revenue rose by 2% year-on-year to $14.54-billion.

Sokalsky said the lower adjusted net earnings mainly reflected higher gold and copper costs and lower realised copper prices, which were partially offset by a higher realised gold price, higher gold and copper sales volumes and a lower income-tax expense.

The full-year adjusted net earnings of $3.83-billion or $3.82 a share were the second highest in the company’s history. The average realised gold price climbed 3% to $1 714/oz.

Gold production in the quarter increased by 12% to about 2.02-million ounces, at an average cash cost of $584/oz. The company produced about 7.42-million ounces of gold in 2012, which was a 3% decline on 2011.

The company said all-in cash costs, which is a new measure gold companies are adopting to more accurately reflect the real cost of sustaining output, exceeded $972/oz in 2012.

“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. The message is clear: the industry must chart a new path forward.

“Barrick highlighted the need for change last year, and we are increasingly taking strong action and refocusing our business based on the principle that returns will drive production, production will not drive returns,” Sokalsky reiterated.

The company expects to produce between 7-million and 7.4-million ounces of gold at an all-in sustaining cash cost of $1 000/oz to $1 100/oz this year. The company said it had recalibrated its long-term gold production to a higher-quality, more profitable base of eight-million ounces by 2016.

The company said capital costs for the Pascua Lama project remained on target at $8.5-billion, but warned that the suspension of prestripping activities at the site had added uncertainty to the expected second-half 2014 production start-up.

The Pueblo Viejo mine, in the Dominican Republic, a joint venture with Goldcorp, was on track to ramp up to full capacity in the second half of the year.

Total capital expenditure this year is expected to be $5.7-billion to $6.3-billion.

Barrick said it had launched a company-wide overhead review and had reduced company-wide overhead costs this year by more than $100-million and expected further reductions through the review process.

As part of the review process, the company said it would divest from assets that did not meet its renewed focus on disciplined capital allocation and its dictum that returns would drive production.

To this end the company last month started the process to divest its energy division. Barrick's talks with China National Gold Group on the sale of its 74% interest in Tanzania-focused subsidiary African Barrick Gold fell through early in the year over a pricing disagreement.