African Barrick to beat output target, cost cuts on track

Reuters

LONDON, Oct 30 (Reuters) - Tanzania-focused miner AfricanBarrick Gold said it would exceed its annual productiontarget and was on track with a cost-cutting plan, giving hopethat the company's new boss is starting to turn the companyaround.

The FTSE 250 company, whose poor performance meant it wasunder pressure even before a gold price rout began in April,said it would produce more than 600,000 ounces. It had said inJuly that output would be at the upper end of previous guidanceof 540,000 to 600,000 ounces.

Bradley Gordon, appointed as chief executive in August, saidin a statement on Wednesday that, as a result, cash costs wouldbe at the lower end of its guidance of $925-$975 per ounce.

Third-quarter pretax profit of $31 million compared with the$34 million it made in the same period last year, on a realisedgold price which was 22 percent lower.

Spot gold was trading at $1,346.11 early onWednesday.

The company said it was on track to meet a goal of over $100million in cost reductions this year to help improveprofitability in a lower gold price environment.

African Barrick is one of many precious metal minersbattling to turn a profit after gold recorded the steepest fallsin a generation earlier this year from which it has yet torecover. The price of gold has fallen over 20 percent so farthis year, prompting many producers to shelve projects, reduceoverheads and put non-core assets on the block.

The company, 74 percent-owned by Canada's Barrick Gold, said an expansion project at its Bulyanhulu mine wason track to start production in the first quarter of next year.

A plan to mine a different part of its North Mara mine,however, would be deferred while it carried out further studies,it added.

Shares in African Barrick, which have slumped 61 percentover the last year, closed at 170.1 pence on Tuesday, valuingthe company at 702 million pounds ($1.13 billion).

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