Barrick Gold Corporation has reported a net loss of $11 million in the third quarter after increasing a tax provision related to the “goodwill” payoff of $300 million agreed with Tanzania.
The mining giant made a net income of $175 million over the same period last year. Barrick produced 1.243 million ounces of gold in the third quarter, at a cost of sales of $820 per ounce compared to 1.381 million ounces, at a cost of sales of $766 per ounce in the prior-year period.
Barrick blamed the decrease in net earnings on the impact of the concentrate export ban by the government and also lower gold production and prices.
The company’s existing tax provision was $128 million but the financial results announced on Wednesday night indicated to have increased by $172 million to $300 million – the amount it agreed would be paid by its subsidiary Acacia to Tanzania as part of the proposed framework reached last week.
Barrick’s move is proof of securing the money due to the government and puts to rest any fear that the funds may not be released. However, the mining company appeared to place a catch on the release of the funds, tying it with Acacia’s business flow and the outcome of talks to lift the ban on concentrate export.
“Given Acacia’s current financial position, these payments would be made over time, using Acacia’s ongoing cash flows. As such, payment would be also conditional on Acacia’s ability to sell doré (gold bars) and concentrate,” Barrick said in its statement.