ABG to exceed 2013 target

Tanzania-focused gold producer African Barrick Gold (ABG) was set to exceed its production guidance of 600 000 oz for 2013, with the resultant cash cost per ounce expected to be below the lower end of guidance of $925/oz, ABG chief executive officer Brad Gordon said on Wednesday.

ABG’s gold production for the three months ended September 30, had increased 11 per cent year-on-year to 164 719 oz, while cash costs, at $730/oz, were 28 per cent lower than that of the prior comparative period.

Production at the company’s Buzwagi and North Mara operations increased 47 per cent and 28 per cent respectively, while at Bulyanhulu, ABG continued to make progress on the mine’s recovery plan, delivering production of 52 126 oz.

Bulyanhulu’s production was broadly in line with that of the second quarter of the year, but declined 8 per cent year-on-year owing to lower throughput.

Meanwhile, the decline in total cash costs per ounce sold was mainly owing to lower labour costs as a result of the operational review, lower general and administrative costs, lower maintenance costs that were achieved as a result of the reduction in mining activity at Buzwagi, and the company’s ongoing general focus on cost-cutting and improved maintenance scheduling, the ABG said.

“The continued focus on operational delivery and the implementation of cost-saving programmes across the group has resulted in our strongest quarter this year,” Gordon said, adding that the company had to continue deepening its operational discipline to ensure it achieved sustainable cash generation.

However, ABG’s revenue declined 17 per cent year-on-year to $221.1-million as the increase in gold sales achieved for the September quarter was more than offset by a 22 per cent decrease in the average realised gold price at $1 310/oz sold in the third quarter of 2013, compared with $1 688/oz in the third quarter of 2012.

Further, the company’s earnings before interest, tax, depreciation and amortisation (Ebitda) at $64.8-million, was 16 per cent lower than that of the previous comparative period owing to the allocation of nonoperational costs at the Tulawak mine, which included retrenchments, costs associated with the operational review and increased unrealised losses on currency hedges not qualifying for hedge accounting.

The adjusted Ebitda of $77.5-million was in line with that of the third quarter of 2012.

The company reported net earnings of $17.8-million, or 4.3c a share, for the quarter under review, compared with $23.8-million in the third quarter of 2012, with adjusted net earnings of $39.1-million, or 9.5c a share, after one-off adjustments mainly relating to the closure of its Tulawaka operation and the company’s operational review.

Operational cash flow amounted to $39.9-million and capital expenditure for the quarter to $83-million, which was in line with that of the previous corresponding quarter. 
Source: The Citizen and Agencies, reported from Johannesburg, South Africa

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