Barrick Gold Corp shares are sinking this morning after warning of $3-billion writedown

TORONTO – Barrick Gold Corp. shares were lower in pre-market trading, following its advance notice of a US$3-billion asset writedown.

Barrick (TSX:ABX) says it will likely be recording the value of its stalled Pascua-Lama mining project on the border of Chile and Argentina and its Pueblo Viejo gold operation in Dominican Republic with a total of between US$1 billion and and US$1.2 billion.

It will also lessen the worth of goodwill – an intangible asset associated with some of its past acquisitions – by about US$1.8 billion.

The Toronto-based company – one from the world’s largest gold producers – says it will offer an update around the writedowns on Feb. 17 when it reports detailed financial and operating results for the year ended Dec. 31.

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The write downs are non-cash items that reflect the reduced long-term value of the assets.

Its shares closed in Toronto on Thursday at $11.90 as well as in Ny at US$8.32 prior to the announcement. The U.S.-listed shares were down three percent from that much cla in extended trading before markets reopened Friday morning.

Barrick also announced Thursday that it produced about 6.12 million ounces of gold and 511 million pounds of copper this past year, both within Barrick’s expectations.

It got about US$1.105 per ounce typically for that gold sold in your fourth quarter and US$1,157 per ounce for the year. For that coming year, however, Barrick assumes its realized price for gold will drop to US$1,000 per ounce in 2016.