African Barrick tanks as output falls and expenses dent takings

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

Shares in the company dived 16 per cent, however, as the firm admitted that first-half profits almost halved to $65m, as higher costs battered its bottom line.

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.