African Barrick Gold sinks on disappointing Q3 results

Shares in London-listed African Barrick Gold (LON:ABG) were falling by over 4% on Friday after rising costs and dipping production impacted the miner’s Q3 profit.

Reporting a 72% decline in third-quarter profit to $29 million, chief executive Greg Hawkins said the quarter was quite a challenging one for the company.

“We were expecting to see a step-up in production levels leading into the end of the year and 2013, but there have been production interruptions and issues across each of our sites.

“The ramp-up in grade at North Mara is positive and expected to continue in fourth quarter, but we have been disrupted in our efforts to mine it at a normal rate given an increase in illegal mining operations,” he said in a statement.

The Tanzania-focused company lowered once again its production guidance, citing illegal mining activities at North Mara and lower-than-planned production levels at Bulyanhulu and Buzwagi.
The miner warned its 2012 production would be between 5% and 10% lower than the bottom of its previous range of 675,000 ounces to 725,000 ounces of gold.

African Barrick Gold, a unit of Canada’s Barrick Gold, is also projecting a cash cost of $900/ounce to $950/once for the financial year, higher than the $790 to $860 figure it forecast in February.

African Barrick’s majority shareholder, Barrick Gold (TSX:ABX) is in talks to sell its 74% stake to China National Gold Group Corporation.