African Barrick Gold on Track Despite Fall in Production

July 23, 2012 at 13:27


The company posted attributable gold production of 153,099 ounces in the three months to 30 June, 11pc lower than in the same period last year, after mining lower grades and having to remove waste material at two mines.

Mining higher grades as the year goes on will help the company meet its full-year production guidance, it said, as well as keeping its costs for the year within its target range.

The reassurance on full-year guidance comes after the company had posted a 17pc drop in output in the first three months of the year, which prompted fears it could miss its full-year production guidance of 675,000 ounces to 725,000 ounces.

The cash cost of producing the gold jumped 46pc on a per ounce sold basis in the quarter, African Barrick said, and while it would keep within its stated cost target range of $790 to $860 per ounce, it would be at the upper end of guidance.

“With the continuing cost pressure in the industry, we will be intensifying our focus on taking costs out of the business with the aim of maximising returns for shareholders,”Greg Hawkins, the chief executive, said in a statement.

African Barrick also said on Monday that it would spend A$20 million (£13bn) onbuying exploration properties in Kenya, expanding its presence outside of Tanzania for the first time, in a deal which will see it enter a partnership with Lonmin.

The FTSE 250 miner, a unit of the world’s largest gold producer Barrick Gold, said it would pay an interim dividend of $4 cents per share, 25pc higher than last year, despite a 30pc drop in earnings in the half-year period.

Shares in African Barrick, which have fallen 20pc in the last six months, fell 4pc in early trading on Monday.