Barrick Gold Corp. reported a fourth quarter loss of $2.85 billion, reflecting the impact of after-tax impairment charges, primarily related to the Lumwana mine ($930 million) and the Cerro Casale project ($778 million). For the full-year 2014, Barrick recorded a net loss of $2.91 billion, reflecting the impact of $3.4 billion in after-tax impairment charges.

Over the last year, Barrick said it cut the head office by close to half and eliminated all management layers between Toronto and the mines. Barrick also modified its executive compensation plan. Leaders will be graded on their collective performance, as measured against a transparent long-term scorecard disclosed to shareholders in advance.

To maintain its dividend, the company said it expects its portfolio to deliver a 10%-15% return on invested capital through the metal price cycle and, as such, individual projects will be assessed against a hurdle rate of 15%. The company intends to reduce its net debt by at least $3 billion by the end of 2015.

Barrick’s five cornerstone mines in the Americas are expected to account for 60% of its production in 2015 at average all-in sustaining costs of $725/oz-$775/oz. At 2 grams per metric ton (g/mt), these mines have an average reserve grade more than double that of its peer group average, according to the company.

Two-thirds of the company’s 2015 exploration budget of $220-$260 million is focused on high-quality, brownfield projects, with the remainder targeted at emerging discoveries that have the potential to become profitable mines. Approximately 85% of the total exploration budget is allocated to the Americas and about half of the budget will be directed to Nevada.

This year, Barrick is advancing growth opportunities at or near existing operations in Nevada, with four prefeasibility studies on track for completion in 2015.

The company also has a number of the world’s largest undeveloped gold deposits, including Pascua-Lama, Donlin Gold and Cerro Casale. These projects offer leverage to higher gold prices, with more than 37 million oz of gold in reserves and more than 48 million oz of gold in measured and indicated resources.

The Goldrush project, located 6 km from the Cortez mine, is one of the largest gold discoveries of the last decade. Measured and indicated resources stood at 10.6 million oz and inferred resources were 4.9 million oz at the end of 2014. The prefeasibility study remains on schedule for completion in mid-2015. Infill drilling in 2014 continued to demonstrate high grade continuity and led to resource upgrades, with nearly 70% of the overall resource now in the measured and indicated category. A permit application for twin exploration declines that will allow the company to better explore the northern limits of the known deposit was submitted in the second quarter of 2014.

The Turquoise Ridge mine contains 4.5 million oz in reserves (75% basis) at an average grade of 16.9 g/mt — the highest reserve grade in the company’s operating portfolio. The company is advancing a project to develop an additional shaft, which could bring forward more than 1 million oz of production, roughly doubling output to an average of 500,000 oz/y (100% basis) at all-in sustaining costs of about $625/oz-$675/oz. The prefeasibility study was completed in January and key permits are expected in the third quarter. Pending approval by the joint venture partners, construction could commence in the fourth quarter of 2015, with initial production beginning in 2019. Preliminary estimates indicate capital expenditures of approximately $300-$325 million (100% basis) for additional underground development and shaft construction, and an attractive payback period of roughly two and a half years using a gold price assumption of $1,300/oz.

A prefeasibility study for underground mining at Cortez below currently permitted levels will be completed in late 2015. Mineralization in this zone is primarily oxide and higher grade compared to the current underground mine, which is sulfide in nature. The limits of the Lower Zone have not yet been defined, and drilling has indicated the potential for new targets at depth. The exploration drift has been extended to the south, enabling additional step-out drilling, which is anticipated to begin in June. Drill results to date include 36.6 m at 31.5 g/mt and 27.4 m at 20.9 g/mt, both oxide in nature, which compare favorably with the average grade of 13.8 g/mt in refractory ore above the 3,800-ft level.

The Spring Valley project, 70% owned by Barrick and located approximately 75 miles west of Cortez, is a low capital cost, oxide heap leach project with potential to become another stand-alone mine in Nevada. Barrick reported an initial measured and indicated resource of 1.3 million oz (70% basis) averaging 0.66 g/mt and an inferred resource of 600,000 oz (70% basis) averaging 0.62 g/mt for Spring Valley at the end of 2014. It expects to complete a prefeasibility study in late 2015.

Pascua-Lama has 15.4 million oz of gold reserves and more than 674 million oz of silver. The mine is expected to have low operating costs and the potential to generate significant free cash flow over a 25-year plus mine life.

The question before Barrick now is whether Pascua-Lama’s economics going forward will justify resuming development. In any scenario, the company must permit and construct a new water management system in Chile. The company plans to submit an application for the new system by midyear, with permitting expected to take two years.