Barrick Gold Chases Returns Instead of Ounces |
| Bloomberg - Jul 27, 2012 |
After years of takeovers and mine expansions buoyed by soaring gold prices, Barrick Gold Corp. (ABX)’s former chief financial officer is bringing the company back down to earth.
Barrick, the world’s biggest gold producer, said yesterday it began a review of all its assets. Chief Executive Officer Jamie Sokalsky, who’s been in the job seven weeks, said some development projects don’t meet new requirements and output targets will be lower. Production growth will be driven by rates
of return, “not the other way around,” he said.
Sokalsky, 55, is bowing to pressure from investors to be stricter on capital allocation and cash flow after the cost of Barrick’s Pascua-Lama mine blew out by as much as 60 percent to $8 billion. After 11 straight years of gains which have seen gold rise more than fivefold, the price of the precious metal is up just 3.6 percent this year, giving producers less room for maneuver and pushing them to focus on returns instead of output. Barrick said July 6 it fired Sokalsky’s predecessor Aaron Regent after being disappointed by its share price performance.
Read Full Article from Bloomberg
- Posted: 2012-07-27 11:59:15
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