Can Barrick Gold Corporation (USA) (ABX) Lead Gold Stocks Higher?

To put this into some type of context, the company said it expects all-in cash cost to be between $1,000 and $1,100 per ounce in 2013 as compared with $945 in 2012. The inclusion of sustaining costs like mine evaluation, environmental rehabilitation, and general administrative costs adds to the total level of the figure. By more accurately reporting this number, however, not only will investors get a better picture of operation efficiency, but the company will be more able to focus on controlling all of these costs as well.

Changing the industry
As the largest gold producer in the world, Barrick is in a position to influence how the total industry behaves. The adoption of this standard will pressure competitors such as Kinross Gold Corporation (USA) (NYSE:KGC) and Goldcorp Inc. (USA) (NYSE:GG) to address similar issues. Within the past week, Kinross took a $3.09 billion writedown associated with impairments to its Tasiast Mine. Kinross CEO J. Paul Rollison said of the charge that the “impairment is a snapshot in time; it doesn’t necessarily reflect our view of the long-term potential of what this asset can be.” Still, the sting is very real. Goldcorp, which recently reported positive earnings, is beginning to adopt the new standard as well.

In addition to the company’s ongoing efforts to control costs, Barrick has made clear that it will immediately suspend the pursuit of any new projects. The company is looking to optimize its current portfolio to maximize shareholder value and take a more investor-focused approach. Sokalsky has maintained the message that growth at all costs is over for Barrick and the industry. This new discipline is bullish not only for the company; it is also bullish for the industry.

The article Can Barrick Lead Gold Stocks Higher? originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman and The Motley Fool have no position in any of the stocks mentioned.

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