"Some shareholders and analysts have expressed frustration with the project and have asked us about the rationale of proceeding with construction in light of the current environment," Jamie Sokalsky, Barrick's president and chief executive said during a conference call Thursday.
"We're about halfway through its development... We have to consider more factors than the last three or four months of price weakness and the volatility in the market when we're evaluating a 25-plus year mine life."
After lingering uncertainty over the future of the Pascua-Lama mine, a Chilean court ruled on July 15 that Barrick can resume construction once it has met its environmental promises.
The miner (TSX:ABX) said on Thursday that it has made progress on the required water management system and is working with Chilean regulators to get the plan approved so that construction can resume.
Barrick also announced it is lowering its quarterly dividend in the wake of lower prices for bullion and copper.
The company said its operating mines performed well during the period but steps must be taken to deal with the changed market conditions.
As a result, Barrick will reduce its quarterly dividend to five cents US per share.
"We recognize the importance of dividends to shareholders, and it is our goal to return more capital to investors in the future, but at this time we believe this is the prudent course of action," Sokalsky said.
Barrick is also taking steps to decrease operating costs by lowering capital spending and staffing levels.
The company will trim $1.5 billion to $1.8 billion from its costs over 2013 and 2014 by cutting capital spending, including laying off staff, at its project in Argentina.
Barrick recorded an US$8.7-billion impairment charge in the second quarter, mainly due to lower metal prices.
The charge includes $5.1 billion for the Pascua-Lama project, $2.3 billion for goodwill impairments and $1.3 billion for other impairment charges.
Excluding unusual items, Barrick had adjusted earnings of US$663 million or 66 cents in the quarter ended June 30 — 10 cents better than analysts had been expecting but down from 82 cents per share last year.
Barrick, which recently announced a deal to sell its subsidiary Barrick Energy in a series of deals worth a total of $455 million, said it is also in the process of selling certain Australian assets.
The company is also looking for ways to maximize cash flow at all of its mines.
"We're prepared to make the tough decisions, including suspending, closing or selling assets," Sokalsky said.
"While the outcome of the process could have an impact on our 2013 year-end reserves, as well as expected future production levels, where possible we will maintain the option to access the metal in the future."
Barrick is one of the world's largest gold producers, so it has been badly affected by the major drop in the price of gold this year. Rising costs at its operations have also put pressure on its profitability.