Tanzania-focused African Barrick Gold sees 2013 output falling by up to 14% y/y.

By bne IntelliNews February 14, 2013
London-listed African Barrick Gold (ABG), the biggest gold producer in Tanzania, expects an output of between 540,000 and 600,000 ounces for 2013, down from 626,212 ounces in 2012, the company said in its annual report. The production guidance disappointed investors, as it suggests output will shrink for the fifth consecutive year. In 2012 ABGs output fell 9% y/y. Investors were also disappointed by ABGs earnings report for 2012. EBITDA dropped 39% y/y to USD 331mn driven by a lower production base and higher costs, while net profit plunged 79% y/y to USD 59mn due to one-off impairment costs. Cash costs jumped 37% to USD 949 per ounce sold on the back of lower volumes and increased energy costs. ABG has initiated an operational review of its business with the focus on reducing costs to ensure the business returns to delivering appropriate levels of free cash flow. CEO Greg Hawkins said that cash flow generation and improving returns from assets form a key part of the operational review, which is expected to run through the coming six months. ABG is 74%-owned by Canda-based Barrick Gold Corporation, the worlds largest gold producer. Last month, Barrick Gold said negotiations to sell its stake in ABG to China National Gold had failed. ABG spun off in early 2010 from Barrick Gold to run its operations in Africa and made an IPO in London in March 2011, where it has a free float of 26%. The company, which is one of the five largest gold producers in Africa, runs four gold mines in northwest Tanzania.
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