Barrick Gold posts 3Q loss on hedging charges

NEW YORK (AP) - Barrick Gold Corp. on Thursday reported a third-quarter loss of $5.35 billion on a huge charge related to the unwinding of gold hedges which had committed it to sell gold at prices that now seem unusually cheap.

Gold has become a safe haven for investors moving away from the weakening dollar, a shift that has pushed gold prices to record highs. The Canadian gold mining company wanted to benefit from these climbing prices - as it expects gold to remain strong - so it unwound a hefty portion of its gold hedges.

Gold hedges are contracts to sell gold ounces in the future at a fixed price. By eliminating gold hedges, Barrick will be able to gain from the expected strength in gold prices going forward.

Barrick's loss amounts to $6.07 per share for the July-September period. It earned $254 million, or 29 cents per share, a year ago.

Excluding the $5.7 billion hedging charge, it said earnings amounted to 54 cents per share. That beats analysts' expectations for adjusted earnings of 46 cents per share.

Revenue rose 12 percent, driven by soaring gold prices. Sales rose to $2.1 billion, up from $1.88 billion in the prior-year period.

Shares of Barrick rose $1.13, or 3.2 percent, to $35.71 in morning trading.

The company said its average realized gold price for the quarter was $971 per ounce, which was $11 higher than the average spot price of $960 per ounce.

For the year, Barrick held to its production estimate, which is between 7.2 million and 7.6 million ounces of gold. Looking ahead, the company predicted a production increase to about 7.7 million to 8.1 million ounces in 2010.