Transparency/Disclaimer: I was compensated modestly by Pershing Gold Corporation to write this article. While I have vetted each company, researched it thoroughly and I’ve done my own due diligence, my due diligence is not a substitute for your own.

Barrick Gold (ABX) has a new CEO, its old CFO, Jamie Sokalsky. The abrupt change in leadership is supposed to signal to the market that the board is proactive and knows that changes need to be made. Whether that change needed to be Aaron Regent can be debated.

What isn’t disputable is the fact that there are fundamental issues at the core of Barrick’s business that need to be addressed. For one, across the sector and industry, there are rising mining costs, the culprits of which range from the price of labor to geopolitical barriers.

With the company’s Pascua-Lama mine in Chile for instance, an inflation in raw materials has prodded management to reassess its initial budgets there. The project’s now estimated to cost the company more than $5B, up from roughly $4B, which is in line with what other large producers and miners are having to go through.

Barrick, Newmont Mining (NEM) and Goldcorp (GG), forecast a 24% increase in mining costs this year, over last. This, while operating income for the three will climb only 12%.

Inflation in the costs of inputs have been coincided with stiffer competition in regions such as Argentina and Chile, for Barrick and other miners that operate there. To continue reading, click here.

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