For the second time this year,Barrick has raised its capital cost estimates for the Pascua-Lama project.

In July the company announced preliminary results of a review indicating the need to increase capital costs at Pascua Lama to between $7.5 billion and $8 billion. However, on Thursday, the company warned capex costs will be closer to $8 billion - $8.5 billion with first production in the second half of 2014.

During a conference call with analysts, Barrick CEO Jamie Sokalsky said, "Delays in the earthworks and underground for the process plant are the primary reason for the indicated shift in schedule."

"The increase in total construction cost is split about equally between the impact of the delay of first gold to the second half of 2014, increased labor hours and installation rates after reviewing these and significantly more detail with Fluor, and also the addition of incremental payments to Fluor to assume project management and additional construction management, as well as increased incentives for Fluor and other contractors to bring the project in time and on budget," he added. Sokalsky estimated $3.7 billion has been spent to date on Pascua Lama.

Barrick's gold production of 1.78 million ounces during the third quarter was slightly below expectations mainly due to lower production and higher cost from Australia Pacific and African Barrick Gold. Total copper production during the period was 112 million pounds. Gold production for the third-quarter 2011 was 1.93 million ounces, while copper production was 140 million pounds.

"We're on track to achieve our production guidance with higher production expected in the fourth quarter," said Sokalsky in the Barrick financials. "Despite some cost pressures, Barrick remains the lowest cost senior gold producer.

Barrick anticipates 2012 gold production of 7.3 million to 7.5 million ounces, within its original guidance of 7.3 million to 7.8 million ounces. Full year 2012 copper production is expected to be 450 million pounds rather than the original forecast of 460 million to 510 million pounds, as the result of the delay in first production at Jabal Sayid in Saudi Arabia.

"We inherited a situation...where the explosives, which are a crucial component of operating a mine and are also a very high-profile item in the country, where that permitting was done under standards that weren't acceptable to the operation of that mine and to the regulatory authorities of Saudi Arabia," Sokalsky told analysts. "We need to make sure that we go through the proper process, do the right thing, completely permit that accurately and build the containment facilities."

For the first nine months of this year Barrick reported gold production of 5.4 million ounces, down from 5.86 million ounces of gold production reported during the same period of last year. The company also reported 338 million pounds of copper output for the first three quarters of this year, up from 308 million pounds a year ago.

FINANCIALS

Barrick reported adjusted net earnings of $2.72 billion or $2.40 per share for the first nine months of this year, down from adjusted net earnings of $3.5 billion or $3.50 per share, reported during the same period of last year.

Net earnings were reported at $2.4 billion or $2.40 per share for the first nine months of the year, down from $3.525 billion or $3.53 per share for the same period of last year.

Barrick's third-quarter 2012 adjusted net earnings were reported at $849 million or 62-cents per share, down from third-quarter 2011 adjusted net earnings of $1.38 billion or $1.38 per share.

Net adjusted items for the third quarter of the year totalled $231 million including $148 million in impairment charges primarily related to a Papua New Guinea exploration property, as well as $71 million in unrealized losses on non-hedge derivative instruments.

Third quarter net earnings were $618 million or 62-cents per share, down from third-quarter 2011 net earnings of $1.37 billion or $1.37 per share.

A Thomson Reuters poll of analysts estimated a profit of 99-cents per share for the third quarter. Bloomberg reported that Barrick earnings "have disappointed for four consecutive quarters."

The 2012 exploration guidance is $450 million to $490 million with more than 100 exploration drill rigs operating globally with over one third of these operating at Goldrush in Nevada and Lumwana.