Barrick Gold Corp. and Kinross Gold Corp. have both taken billions of dollars of writedowns and taken an axe to their dividends as they struggle with lower metals prices that have savaged their bottom lines.

On Thursday, Barrick Gold reported an $8.56-billion US loss and slashed its quarterly dividend by 75 per cent to five cents a share as bullion and copper prices languish far below their previous highs.

It also signalled plans to cut jobs and lower capital spending.

Barrick recognized an $8.7-billion impairment in the second quarter, mainly due to lower metal prices. The gold mining giant has also run into major delays in its efforts to build a big mine in South America.

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Barrick Gold 3-month TSX trading chart

"Over the past year, we have taken and are continuing to take a series of steps to reduce costs as part of our disciplined capital allocation framework, which allowed us to respond quickly to the new metal price environment," said Jamie Sokalsky, Barrick's president and CEO.

"The bulk of our expected 2013 gold production is at all-in sustaining costs well below current spot levels, and for those operations that are not generating positive cash flow, we will change mine plans, suspend, close or divest them."

The story was much the same at Kinross Gold. After the markets closed Wednesday, it reported a net loss of $3.2 billion US as it recorded an after-tax impairment charge of $2.29 billion because of falling gold prices and the delay of an open pit gold mine in Mauritania. It took a further $720-million charge related to development difficulties at a project in Ecuador. 

Kinross will trim spending by almost 10 per cent this year to $1.45 billion. It has also suspended its semi-annual dividend to preserve cash.

"This was a difficult decision, but we believe it is the right decision in today's challenging and uncertain gold price environment," said Kinross CEO J. Paull Rollinson in a statement.

Including the latest impairment charges, Barrick Gold and Kinross Gold have now taken total impairment writedowns of $21 billion since the end of 2011.

Gold prices, which hit an all-time high above $1,900 US an ounce in August 2011, have since plunged to just over the $1,300 US level today.

That has hit gold miners hard, as the industry is very capital-intensive. Many gold miners, like Barrick, have gone deeply into debt to finance new development projects. So when gold prices fall along with demand, and borrowing costs rise, they are especially vulnerable.

The big mining companies are now figuring out which projects make sense in the light of the new reality of sharply lower prices for the precious metal.

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Kinross Gold 3-month TSX trading chart

"That process is going to take time," says Alec Kodatsky, a Toronto-based mining analyst for CIBC World Markets. "The upcoming quarter is going to be very important for that, but until then, people are going to remain on edge."

But Kodatsky says some gold mining equities could be "a very interesting place to be." He likes Goldcorp, citing its strong growth prospects.

Carter Worth, chief market technician for Oppenheimer & Co., also sees some upside potential amid all the despair in the gold sector.

"Everyone has been destroyed, so if you buy them now, there is limited downside if you are wrong," he told Reuters. "But if you are right, there could be a whole lot of upside."

Barrick Gold investors, at least, seemed to be looking on the bright side of the huge impairment writedowns and cash-saving moves. Barrick shares jumped 46 cents to close at $17.46 on Thursday as the company's core operations did manage to beat earnings expectations.

Kinross Gold shares slipped six cents to $5.28.

With files from Reuters and The Canadian Press