African Barrick Gold Sees Drop In Annual Production

Gold-bullion

VENTURES AFRICA – African Barrick Gold posted a 9 percent drop in annual production despite a pick-up in mining in the fourth-quarter, Tanzania’s largest gold miner said late on Thursday.

Barrick Gold is a division of the world’s largest gold producer Barrick Gold Corp. It has suffered from three consecutive years of declining gold production.

However, it expects to turn around its operations after launching an operational evaluation this year, aimed at creating an organizational structure more suited to its asset base.

Full-year sales of gold fell 13 percent to 609 252 oz., compared with the 699,539 oz. sold in 2011. But fourth-quarter output rose 13 percent year-on-year and 22 percent quarter-on-quarter boosted by improved throughput at the group’s Buzwagi operation and increased head grade at the North Mara and Buzwagi mines.

African Barrick reported gold production of 180,684 ounces and sales of 159,585 ounces in the three months to the end of December 2012.

CEO Greg Hawkins said full-year cash costs per ounce sold were expected to be in line with guidance of between $900/oz. to $950/oz.

Hawkins said 2012 is a good base to work from. “If you look at our core assets Bulyanhulu, Buzwagi and North Mara, they produced 600,000oz in 2012 and we’re using that as a base for 2013 at the moment,” he said.

He added that if that’s about where the production will be, taking into account all the risks, then we need to tackle our cost structure to generate more cashflow.

The company’s operational review was announced recently after the failure of talks that could have seen China National Gold Group Corporation buy a controlling stake in African Barrick Gold from Barrick Gold Corp.

The fourth-quarter output on an annualized basis would put the company on track to produce 723,000oz this year if last quarter’s output were to be repeated throughout 2013. Hawkins, however, said the company preferred to be more conservative.

The fourth-quarter figure showed what they could do when a few things go their way, he said.

“But we’re cautious. Things don’t always go as you like. (And) remember, Buzwagi was in a good grade patch,” he added.