TORONTO (Reuters) - 18/02/10 "Barrick Gold Corp (ABX.TO) said on Thursday it will spin off its African gold assets into a new publicly traded company.
Barrick announced the moves as it unveiled a doubling of fourth-quarter operating profit, driven by gold prices that soared to record levels in the final three months of 2009.
The new company, to be called African Barrick Gold (ABG), will list on the London Stock Exchange and will hold Barrick's African gold mines and exploration properties. Barrick plans to retain a 75 percent interest in ABG initially.
ABG also intends to seek a future listing on the Dar es Salaam Stock Exchange in Tanzania.
Barrick, the world's top gold producer, operates four African mines, all in Tanzania.
ABG is expected to produce 800,000 to 850,000 ounces of gold in 2010, with total reserves of 16.8 million ounces as of December 31.
"Size-wise it's bigger than (mid-tier miner) Randgold Resources (RRS.L) and certainly it would be... one of the prime gold listings on the LSE," said Leon Esterhuizen, an analyst at RBC Capital Markets in London.
Due to the spinoff, Barrick trimmed its 2010 production forecast to a range of 7.6 million to 8.0 million ounces from its previous estimate of 7.7 million to 8.1 million ounces.
Barrick said it plans to use proceeds from the ABG spinoff to fund its pipeline of development projects.
PROFIT RISES, TOPS ESTIMATES
Excluding a $241 million charge related to the hedge book buyout and other one-time items, fourth-quarter earnings rose to $604 million, or 61 cents a share, from $277 million, or 32 cents a share, a year earlier.
Analysts polled by Thomson Reuters I/B/E/S had expected, on average, 57 cents a share.
On a net basis, Barrick earned $215 million, or 21 cents a share, compared with a year-earlier loss of $468 million, or 53 cents a share.
Revenue jumped 13 percent to $2.36 billion.
Average realized gold prices in the quarter were $1,119 per ounce, up from $809 a year earlier, as the metal charged to a record price above $1,200 an ounce in the final months of the year. This offset the impact of a 17 percent drop, to 1.8 million ounces, in the amount of gold Barrick sold .
Total cash costs per ounce, which Barrick expects to come down as it opens new lower-cost mines, were little changed at $474.
Barrick expects 2010 gold production costs in a range of $425 to $455 per ounce. In 2009 it produced 7.42 million ounces at a total cash cost of $466 per ounce."
($1=$1.04 Canadian)
The deal, arranged by J.P. Morgan (JPM.N) and Morgan Stanley (MS.N), will run a bookbuilding between March 5 and March 18.

I guess the lack of power supply has affected ABG's production.
I think fair price would be 420-440p.

18 Jan 2012 - 13:14

Jan 18 (Reuters) - African Barrick Gold PLC :

* Rbc cuts African Barrick Gold price target to 700P from 800P END

Ill take 700p any day. Nice.

..Questor share tip: Despite all its setbacks, ABG retains some lustre

By Garry White | Telegraph –

......
African Barrick Gold (ABG) has suffered a series of setbacks since it listed in London in 2010 but 2012 could be the year its fortunes start to turn.

African Barrick Gold 467.8p +0.2 Questor says HOLD

ABG was spun out of Canadian-listed producer Barrick Gold, floating at 575p a share in May 2010. The shares are now around 19pc below this.

Mining (Euronext: SMI.NX - news) in Africa is always a challenge and ABG's challenges have come thick and fast. Just two months after listing, the company was forced to cut its production guidance because of a "delay in accessing the higher-grade primary ore" at its Buzwagi mine.

Then, in October 2010, the company revealed it had uncovered an "organised and systematic" fuel theft ring at Buzwagi. It said criminal gangs had "widely infiltrated" the mine and 40pc of its mining department were suspended, hitting production further. Security has since been tightened.

The next setback for ABG was a raid at its North Mara mine in May 2011. A machete-wielding mob attacked the site in a mass attempt to steal gold. As a result, ABG unveiled plans in October last year to build a 14km wall to prevent any future incursions.

Yesterday, ABG unveiled its production reports that showed power shortages in Tanzania resulted in fourth-quarter gold production falling by 11pc year on year. Production for the full year was 688,278 oz, a 2pc fall. The company had warned of the power issues in December.

ABG is installing back-up power generation to rectify this issue, so it should have more stable production during 2012, although this could negatively impact on cash costs. Gold sales for the full year were 699,539 oz, some 2pc above production. The group also ended the year with cash balances of about $584m (£379m) and no debt.

There was no guidance on expected production and cash costs in 2012 in yesterday's statement. This will come on February 16, when the full-year results for 2011 are released. However, production is expected to be roughly flat. Production growth is expected from the end of 2013 into 2014, but the results of exploration at its Nyanzaga Project should be known in the next few weeks and that could ultimately end up with the company building a fifth mine in the country.

The shares are trading on a December 2012 earnings multiple of 7.1 times, falling to 6.7 in 2013. The prospective yield is 1.2pc.

City analysts are very upbeat about the prospects. Out of the 20 analysts covering the shares and monitored by Bloomberg, 14 have buy recommendations and six say hold. The average price target is 684p a share, almost 50pc above the current price. Investors could find this an attractive entry point.

However, Questor would rather wait until some clarity is given in a few weeks' time on 2012 prospects and results from Nyanzaga are released before assigning a buy. So, for now, hold

Drilling Success Leads to Significant Resource Expansion at Nyanzaga

3.5Moz Au Indicated and 0.6Moz Au Inferred

ABG is pleased to announce a significant uplift to the previously declared
Mineral Resource estimate for the Tusker deposit at the Nyanzaga Project. This
increases our confidence that the project, which comprises the Tusker and
Kilimani deposits, has the potential to be our next mine in Tanzania.

The updated in-pit resource is in excess of 4Moz Au, consisting of 3,481Koz at
1.47g/t Au Indicated and 598Koz at 2.05g/t Au Inferred. This represents a
fourfold increase on the previously declared resource of 313Koz Indicated and
650Koz Inferred, and is another highly encouraging step in the Company's
overall strategy of realising the potential of its existing portfolio of high
quality assets.

http://www.moneyam.com/action/news/showArticle?id=4298298

Summary note from RBC (house broker):
"Our price target of £7.00 (unchanged) reflects a 50:50 blend of 1.20x P/NAV and 6.0x P/CF, based on our 2012 estimates. We retain our Outperform rating and above Average risk qualifier. We expect a positive response from the stock on the basis of this announcement that demonstrates the growth potential in the company’s exploration portfolio."

Numis note:
African Barrick (Buy 640p). "Positive resource update. Resource estimate for the long awaited Nyanzaga project, comprising the Tusker and Kilimani deposits, increases Tusker by four-fold to 4Moz, consisting of 3.5Moz at 1.5g/t in Indicated and 600koz at 2.05g/t in Inferred. A scoping study is expected to be completed in Q1/Q2, with further deeper drilling throughout this quarter. Initial resource estimate for Kilimani is expected at the FY results in Feb. Positive in that it confirms previous historic estimate and a significant increase on ABG’s initial resource for the project. We include a nominal $250m (40p/sh) in our NAV for ABG’s exploration properties, although we may see this increase if the scoping study results in an economic project with some decent scale. No change to our TP and recommendation at this stage. Stock currently trading at 1.4x NAV and 4.1x CF, below the peer group."

From this week's Shares Mag:
"Dan Coatsworth
A four-fold increase in the amount of gold at the Nyanzaga project should trigger a re-rating in Tanzania-based African Barrick Gold (ABG). It now has 4.1 million ounces at the gold deposit. This should help silence those critics who are questioning from where the next leg of the company’s growth will come.
Shares in the £2 billion market cap were weak in the first half of 2011 after security problems at its North Mara mine. A summer rally was shortlived as African Barrick then disappointed at its third-quarter results (20 Oct) when mine costs came in above consensus forecasts. On 9 December, analysts downgraded their estimates for the Buzwagi mine after power problems implied operating expenditure would rise.
African Barrick will report full-year results in two weeks’ time (16 Feb), where it will outline production estimates for 2012. A resource on the latter should be released alongside the results. RBC Capital Markets reckons it will produce 789,000 ounces of gold, 15% more than 2011’s output of 688,278 ounces. Bulyanhulu and North Mara should move into higher grade material while Buzwagi’s grades may drop, it says. Nyanzaga was inherited through the acquisition of Tusker Gold in May 2010. It consists of the main Tusker deposit and the smaller Kilimani deposit. A resource on the latter section should be published at the same time as the final figures in a fortnight’s time. Last week’s (27 Jan) resource upgrade focused on the Tusker section where the miner now has 3.5 million ounces in the indicated category and 600,000 ounces in the inferred category."

StockMarketWire.com
African Barrick Gold reported revenue of $1.218bn for the year to end-December, up 25% on 2010. EBITDA was $544m, up 30% on the prior year.

Barrick said this strong earnings growth supports a trebling of proposed final dividend.

The company recorded a cash margin of $895 per ounce, an increase of 33% on 2010.

Net profit attributable to owners was $275m, with EPS of 67.0 cents, up 26% on 2010.

Operational cash flow was $498m, an increase of 44% on 2010.

Barrick had a cash position of $584m at 31stecember 2011.

The company proposed a final dividend of 13.1 cents per share; total dividend for 2011 of 16.3 cents per share, up 208% on 2010. Attributable gold sales for the year were 699,539 ounces (Group sales of 724,574 ounces), a 3% decrease on 2010.

Attributable gold production was 688,278 ounces (Group production of 713,508 ounces), 2% below 2010 production.

CEO, Greg Hawkins, said: "The underlying performance of each of our assets has improved over the year with three of the four mines achieving production increases, despite the impact of the unreliable power situation in Tanzania. Our strategic investment in exploration has led to a fourfold increase of the resource at Nyanzaga and as a result our total resource base now stands at over 31Moz. The capacity of our assets to generate strong cashflows has again been demonstrated and this is reflected in our decision to treble our dividend payout over 2010 and to set out our dividend policy for future years. In 2012, we expect to produce between 675,000-725,000 ounces of gold at a cash cost of between $790-$860 per ounce sold, whilst also continuing to advance our portfolio of growth projects and assess other opportunities to expand our asset base."

Good results, but SP down this morning - ??

Production & sales were actually down from last year, though not by a huge amount. Also most stocks are down today which makes things worse!

thnx, HC

Addison

off topic , but my old school was Addison Gardens , no connection by any chance ?

aldwickk, soz, no connection, nice name for a school , bet that wasnt in Hackney

No , Shepherds Bush

Citigroup downgrades African Barrick Gold from buy to sell, target price cut from 655p to 419p.
Fox Davies Capital downgrades African Barrick Gold from buy to hold, target price cut from 578p to 489p.
Numis downgrades African Barrick Gold from buy to add, target price cut from 640p to 520p.

time to buy then harry.,.

Time to buy ABG... too cheap now.

Barrick going for `Tusker` goldmine at Nyanzaga
BY PATRICK KISEMBO

Africa Barrick Gold (ABG) has reaffirmed plans to continue investing in its Tanzanian operations this year and beyond, in order to improve efficiency in its four gold mines and explore the potential of developing a fifth mine at its Nyanzaga deposit.
"The operations continue to make progress. We've had our challenges over the last couple of years, and it’s vitally important that we seek to deliver what we have set out to the market and to ourselves during 2012 and beyond," African Barrick Gold CEO Greg Hawkins, said.
"We are looking for growth .... You would have heard us talk about the Nyanzaga project -- the ‘Tusker’ deposit -- and the potential delivered by our exploration team which has worked very, very hard over the last 18 months to declare a 4-million ounce resource out there. So, a real potential fifth mine in Tanzania and something that can really grow the business over the next few years," Hawkins said.
ABG acquired Tusker Gold in May 2010, giving the company 100 percent control of the Nyanzaga project.
Hawkins, speaking at the Barrick Excellence Awards ceremony at Buzwagi mine this week, reaffirmed ABG's commitment to Tanzania in mining gold.
ABG targets increased overall output for its four gold-producing mines in Tanzania -- Bulyanhulu, North Mara, Buzwagi and Tulawaka - and will look to control cash costs further, he said.
"Cash costs are a key focus for us. Our best leverage for improving our cash cost per ounce performance is to produce more ounces and I think we've got some options at all the mines to be able to improve the production level and that will help us manage our cash cost per ounce," he added.
The largest gold miner in the world, with current production of close to 700,000 ounces of gold in Tanzania, ABG plans to boost production to one million ounces in the country per year by 2014.
The company, which has invested around USD2bn in its Tanzanian operations so far, currently employs 5,400 people.
Hawkins applauded ABG employees who were awarded the 2011 excellence awards in various fields, including safety, security, community relations and the environment.
"I congratulate all the winners. We should all be very proud ... there are not too many of these awards that are handed out across the entire organisation, so you should be very proud," he said.
"To the teams that have put in the effort and the individuals that have received the awards, this is an enormous achievement," he said. Some senior officials from ABG's parent company, Toronto-based Barrick Gold Corporation, attended the employees’ excellence award ceremony at the Buzwagi mine in Tanzania.
Barrick's Vice-President for Safety, Health and Risk, Craig Ross, said ABG's mines in Tanzania had made great strides in improving their health and safety performances over the past few years.
"If you look at the health and safety statistics across the board at ABG, you can see significant improvements," he said.
"What has been done with the safety awards -- recognizing people -- is to see that expanded to the environmental awards, CSR (corporate social responsibility) awards and security awards. It shows the company ethos, which is all about people," he said.

Nyanzaga Resource Continues to Grow

Total Resource now 3.75Moz Au Indicated and 0.85Moz Au Inferred

ABG is pleased to announce a further uplift to the previously declared Mineral Resource estimate for the Nyanzaga Project, with the addition of the Kilimani zone. This continues to increase our confidence that the Nyanzaga project, which comprises the Tusker and Kilimani mineralised zones, has the potential to become our next mine in Tanzania.

The inclusion of this near surface, oxide resource in the Kilimani zone and the further expansion of the overall in-pit resource should improve the overall project economics with additional production at the start of the mine life.

The in-pit resource has been increased by a further 0.5Moz and is now in excess of 4.6Moz Au, consisting of 3.75Moz at 1.42g/t Au Indicated and 0.85Moz at 1.81g/t Au Inferred. The updated modelling now confirms the opportunity to exploit the Tusker and Kilimani mineralised zones in a single open pit, and is another highly encouraging step in the Company's overall strategy of realising the potential of its existing portfolio of high quality assets.

Since announcing the updated mineral resource for the Nyanzaga project in January 2012, desktop scoping work has focused on the modelling of the Kilimani near-surface resource, whilst field activities have focused on continuing geotechnical, hydrology and metallurgical drill programmes to allow us to better constrain the open pit model. As a result of the addition of the Kilimani resource we have been able to re-model the open pit resource, which has resulted in a larger, single pit incorporating both the Tusker and Kilimani resource areas.

Commenting on the expanded Mineral Resource at Nyanzaga, CEO Greg Hawkins said:
"The addition of near surface, oxide ounces and resulting further expansion of the overall deposit further increases our confidence in the potential for Nyanzaga to become our next mine in Tanzania. Not only does it add to the overall scale of the deposit but it further improves the economics with an improved production profile early on in the life of the project."

..African Barrick Gold production worse than expected

By Garry White | Telegraph – 24 minutes ago

IVKA.F 4.88 0.00

......
Tanzanian-focused miner African Barrick Gold posted a 17pc fall in first quarter gold production, sending its shares down.

The fall in output was against a weak comparison in the first quarter of last year, when production fell 2pc dues to power outages.

African Barrick Gold

In the three months ending March, pre-tax profits slumped by 26pc to $55m (£34.2m) after a 22pc rise in costs.

This year’s production slide was caused by “the ongoing waste stripping at North Mara and reduced head grade at Buzwagi as planned.” The company, which is majority owned by Canada’s Barrick Gold, produced 144,643 ounces of gold in the first three months of the year.

“We had expected African Barrick Gold (ABG) to deliver a weak first quarter result and it did not disappoint,” Investec (Frankfurt: A0J32R - news) analysts Hunter Hillcoat said. “We should see an ongoing lift in ABG's operational performance across 2012, but otherwise find it difficult to see a positive catalyst, other than potential gold price performance.”

The company maintained its full-year gold production targets of 675,000 to 725,000 ounces at a cost of producing each ounce of $790 to $860 per ounce. Analysts think it is now likely that output will come in at the lower end of the forecast range.

ABG was spun out of Barrick Gold, the world’s largest gold miner by market capitalisation, in March 2010 but has experienced a series of setbacks since listing in London. Listed at 575p the shares are about 36pc below their flotation price.

Problems included a fuel-theft ring at one of its mines, a machete-wielding mob attacking the North Mara mine, in a mass attempt to steal gold, and power problems.

It currently operates four mines in north-west Tanzania and has a number of exploration projects.

The shares fell 4.05p to 364.85p in early trading.

..

StockMarketWire.com
African Barrick Gold has received final approval from the Tanzanian vice-president's office responsible for environment for the potentially acid forming waste rock permit at its North Mara mine, with immediate effect.

The granting of the PAF permit, together with the non-acid forming permit which was granted in late 2011, will allow ABG to progress the major waste stripping programme in the Gokona pit at North Mara in order to open up higher grades zones in the open pit in the second half of 2012.

Chief executive Greg Hawkins said: "This approval is an important milestone for North Mara in delivering its mine plan going forward.

"As we have previously communicated, our waste stripping activities had been constrained and we now look forward to being able to access the higher grade zones in the Gokona pit from the second half of this year onwards as expected."