BARRICK Gold has finalised a joint venture deal with Chinese company Zijin Mining, including the sale of a 50 per cent interest in Barrick (Niugini) for total cash consideration of US$298 million.

In a statement, Zijin said the project was a vital step for both Zijin and Barrick Gold to establish a strategic partnership, and is significant for Zijin’s internationalisation.

Barrick (Nuigini) is the 95 per cent owner of the Porgera joint venture gold mine in Papua New Guinea.

In its second quarter report, Barrick Gold reported a net loss of US$9 million, with adjusted earnings of US$60 million.

Second quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was US$725 million.

The Porgera mine produced 118,000 ounces in the second quarter, which was slightly below plan on lower open pit grades.

All-in sustaining costs of US$1,128 per ounce at Porgera were lower than expected, as a result of lower capitalised stripping costs due to fewer waste tonnes mined and lower sustaining capital, the company reported.

Production at Porgera in 2015 is expected to be between 400,000 and 450,000 ounces at an all-in sustaining cost of between US$1,025 and $1,125 per ounce.

Overall, Barrick adjusted gold production guidance to between 6.1 million and 6.4 million ounces for 2015, which reflects the impact of divestments, with production 55% weighted to the second half of the year.

Costs are expected to be 10% lower in the second half of 2015 and the full year all-in sustaining cost guidance US$840 and US$880, down from US$860 and US$895 per ounce.

Anticipating the potential for weaker gold prices in the second half of 2015, Barrick is targeting US$2 billion in reduced expenditure across the company by the end of 2016.

These reductions will come from operating expenses, capital spending and corporate overhead, Barrick said.

To date, Barrick has identified US$1.4 billion in potential opportunities.

This will strengthen the resilience of the portfolio in a lower gold price environment, while positioning the company to deliver stronger margins when gold prices recover, Barrick said.

The implementation of a lean, decentralised operating model designed to maximise free cash flow and take costs out of the business has helped to mitigate the impact of recent gold price declines, Barrick said.

The company is on track to achieve $90 million in reduced general and administrative expenditures by 2016, with $300 million in capital spending already cut this year.

Barrick remains focused on improving productivity and reducing operating costs to ensure the business is robust enough to generate a return of between 10% and 15% on invested capital through the metal price cycle.

The Porgera joint venture is an open pit and underground gold mine, located in the Enga province of Papua New Guinea.

Barrick (Niugini) holds 95% interest in the project, with Barrick (Niugini) 50% owned by Barrick Gold and the remaining 50% Zijin Mining.

Mineral Resources Enga holds the remaining 5% interest in Porgera, and is divided between the Enga provincial government (2.5%) and local landowners (2.5%).