Tanzanian troubles drag down Barrick's production

Canada’s Barrick Gold (TSX, NYSE:ABX), the world’s top bullion producer by volume, reported Thursday a drop in production during the third quarter due mainly to ongoing issues between its majority owned subsidiary Acacia Mining  (LON:ACA) and the Tanzanian government.

The Toronto-based miner said preliminary results show it produced 1.24 million ounces of gold in the quarter ended Sept 30, less than the 1.38 million ounces produced a year earlier.

The average market price for gold in quarter fell to $1,278 per ounce from $1,333, Barrick said.

Acacia Mining sold less gold than it produced as a result of a ban on exports of gold and copper concentrate in Tanzania. 

Acacia Mining, Tanzania's No.1 gold producer, has faced government pressure in the East African nation since March, when President John Magufuli imposed a ban on gold concentrate, which represents about a third of the company’s output.

Further hurdles, including permit issues and curtailed operations at its main Tanzanian mines hit Acacia’s output in the quarter.

In a separate statement, Acacia said earlier Thursday it sold less gold than it produced as a result of the concentrates ban. The company generated 191,203 ounces of gold — beating expectations — but sold only 132,787 ounces, it said.

Barrick had warned in July that up to 6% of its expected output for 2017 could be severely hit the export ban affecting its subsidiary in Tanzania.

The company, however, is pinning its gold production hopes on a recovery in the fourth quarter.

“Our operations continue to deliver solid results and remain on track for the year,” Barrick President Kelvin Dushnisky said in the statement. "As stated previously, we expect higher production and lower costs in the fourth quarter."

The gold miner will report full third-quarter financial results on Oct. 25.