Barrick Gold posts Q3 profit of $254M US

Three-month TSX trading for Barrick Gold

Barrick Gold Corp. reported a third-quarter profit of $254 million US Thursday, down from $345 million for the same period a year earlier.

Toronto-based Barrick, which reports in U.S. dollars, said the results include charges of $97 million related to impairment of its interest in Highland Gold and other portfolio investments.

The earnings of 40 cents per share fell short of the average forecast of 45 cents a share by analysts surveyed by Thomson Financial.

Sales rose to $1.88 billion from $1.68 billion as Barrick realized a "historically high" price of $872 per ounce.

The company raised production to 1.95 million ounces at cash costs of $466 an ounce, giving it a cash margin of $406 an ounce.

That compared to production of 1.93 million ounces at a cash margin of $316 per ounce for the same period last year.

Copper production was 87 million pounds at cash costs of $1.60 per pound, but "a stronger operating performance is expected in the last quarter of the year," Barrick said.

The company said its copper production is fully hedged for the rest of 2008 and 2009 with an average floor price of just over $3 an ounce.

Barrick bolstered its liquidity with a $1.25-billion bond issue in September, giving it a cash balance of over $1.7 billion and undrawn credit of $1.5 billion, against net debt of $2.5 billion.

"While gold prices have been volatile in the face of a global credit crisis as investors have liquidated positions across all asset classes, we continue to be positive about the underlying fundamentals of the gold market and the long-term prospects of Barrick," chair and interim CEO Peter Munk said in a release.

"The company is well positioned to succeed in this challenging environment and continues to offer investors a unique opportunity to participate in the gold industry leader with the highest rated balance sheet, the largest production and reserves and a track record of generating strong earnings and cash flow," he said.

Shares of Barrick Gold were down 38 cents to $27.52 in afternoon trading on the TSX.

With files from the Canadian Press