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UPDATE 1-Barrick to suspend construction at Pascua-Lama mine

Thursday, 31 Oct 2013 | 7:08 AM ET

Oct 31 (Reuters) - Barrick Gold Corp said on Thursday it will suspend construction at its Pascua-Lama mine, a surprise reversal on a project that has cost billions after years of delays and cost overruns.

Barrick also reported a decline in third-quarter earnings, hurt in part by a drop in the price of gold.

"We have determined that the prudent course - at this stage - is to suspend the project, but naturally we will maintain our option to resume construction and finish the project when improvements to its current challenges have been attained," Chief Executive Jamie Sokalsky said in a statement.

The world's biggest gold producer had been expected to raise its estimate on the cost of completing the project, located high in the Andes on the border between Chile and Argentina.

Barrick said it will continue activities needed to comply with regulatory requirements and protect the environment.

Earnings attributable to Barrick shareholders fell to $172 million, or 17 cents a share, in the quarter, from $649 million, or 65 cents, a year earlier. Revenue dropped to $2.99 billion from $3.40 billion.

Excluding an unusual tax expense and other items, adjusted earnings fell to 58 cents a share from 88 cents a year earlier. Analysts, on average, expected 50 cents a share, according to Thomson Reuters I/B/E/S.

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