African Barrick Gold maintains 2012 targets as costs rise

 
City A.M. Reporter
Miner African Barrick Gold said it was on track to meet its 2012 production targets despite posting an 11 per cent drop in quarterly production.

The Tanzania-focused company posted attributable gold production of 153,099 ounces in the three months to 30 June, 11 per cent lower than in the same period last year, after mining lower grades and having to remove waste material at two mines.

Mining higher grades as the year goes on will help the company meet its full-year production guidance, it said, as well as keeping its costs for the year within its target range.

The reassurance on full year guidance comes after the company had posted a 17 per cent drop in output in the first three months of the year, which prompted fears it could miss its full-year production guidance of 675,000 ounces to 725,000 ounces.

The cash cost of producing the gold soared 46 per cent on a per ounce sold basis in the quarter, African Barrick said, and while it would keep within its stated cost target range of $790 to $860 per ounce, it would be at the upper end of guidance.

"With the continuing cost pressure in the industry, we will be intensifying our focus on taking costs out of the business with the aim of maximising returns for shareholders," chief executive Greg Hawkins said in a statement.