African Barrick soars as raised output guidance deflects losses
AFRICAN BARRICK Gold’s share price shot up five per cent yesterday, after the FTSE 250-quoted miner pleased investors with raised production guidance and better-than-expected cost cuts.
The Tanzania-focused explorer, which has struggled with operational issues and a weak gold price over the past year, said it had beaten guidance with production of 641,931 ounces in 2013 and a 12 per cent fall in cash costs to $827 (£499) per ounce sold.
For 2014, the company expects increased production of 650,000 to 690,000 ounces of gold at reduced cash costs of $740 to $790 per ounce.
“ABG has underlined its continued operational improvements with production and costs for 2013, both beating guidance,” said Rob Broke, analyst at Westhouse Securities.
“The ongoing review has enabled the company to maintain its robust cash position and so continue its dividend. On the back of this strong performance, we believe ABG’s guidance [for] 2014 is realistic.”
But ABG reported a $781m loss in 2013 from a $62.8m profit a year earlier on the back of a $823m impairment charge. The firm attributed this to “mine planning changes and lower gold price assumptions”.