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.

StockMarketWire.com
African Barrick Gold's board has approved the order of long lead items to expand the Bulyanhulu Upper East project.

The project was previously solely based on the 1.2 million ounces of reserves located in Reef 1 of the Upper East zone, but ABG has now completed a positive scoping study to incorporate the 900,000 ounces (koz) of gold which currently sit in reserves in Reef 2 of the Upper East zone.

ABG is now progressing with pre-feasibility and feasibility work on Reef 2 with the aim of completing a combined feasibility study for both reefs by the end of the first quarter of 2013.

Production from the Upper East zone is targeted to begin in late 2014 and is now expected to average in excess of 90koz per annum over the life of mine at average cash costs of $608 per ounce.

ABG says the incorporation of Reef 2 significantly enhances the project economics, driving a post tax IRR of 34% at $1,700 per ounce.

The project is estimated to require approximately $100m of pre-production capital, to be spent in 2013 and 2014 and is planned to deliver life of mine production of 1.86Moz over the next 20 years.

Chief executive Greg Hawkins said: "One of our key aims for this year is to progress the expansion of Bulyanhulu in order to accelerate the realisation of the value provided by the scale of the reserve base.

"In May we received board approval for the CIL expansion, and we have now successfully expanded the scope of the Upper East project whilst maintaining our planned timeline for first production.

"With the two expansion projects, we now have a clear path to increasing production levels at Bulyanhulu towards 400,000 ounces per annum over the coming years."

StockMarketWire.com
African Barrick Gold's cquisition of Aviva Mining (Kenya) from Aviva Corporation has been approved by the Kenyan Competition Commission.

All conditions have now been satisfied and the transaction will now be finalised.

ABG chief executive Greg Hawkins said: "With the final condition for the acquisition of AMKL now satisfied we look forward to continuing the successful exploration programme on this highly prospective land package.

"ABG has a proven track record of successfully developing early stage prospects into large scale deposits and we are confident of further successes in Kenya."

..

Questor share tip: Time to sell African Barrick Gold
By Garry White | Telegraph – 2 hours 37 minutes ago


African Barrick Gold has cut production guidance again. Questor says sell.

African Barrick Gold 465p Questor says: SELL

African Barrick Gold (ABG) issued yet another disappointing statement on Friday which has become something of a habit.

The negative news this time was a cut in full-year production guidance and a surge in costs, which caused third-quarter profits to fall by more than 70pc.

This is the third consecutive year that the company has been forced to cut its production guidance. It has endured fuel-theft rings, raids on its mines and power shortages over the relatively short time it has been listed in London.

ABG said full-year gold production would now be about 5pc to 10pc below the lower end of its 675,000 to 725,000 ounce guidance.

ABG was spun out of Canadian gold behemoth Barrick Gold in 2010, the world’s biggest producer of the precious metal. It was floated at 575p a share, before slumping to lows below 310p a share in the past few months.

Barrick is currently in talks with China National Gold Group about selling its 74pc stake in ABG to the state-owned company. The shares jumped substantially since the talks were revealed and, should an agreement fail to be reached, Questor sees significant downside.

In fact, given Friday’s gloomy news, there is potentially more downside in the event China walks away than upside should a deal be struck. This means the risks look skewed to the downside.

Questor has recommended the shares as a buy as low

as 317p and as high as 448p, so all investors who acted on the advice are sitting on a profit. Questor thinks it is time to bank these gains and the shares are a sell.

Sell ABG now... a good short at 433p.

StockMarketWire.com
Barrick Gold Corporation is no longer in talks over its holding in African Barrick Gold with China National Gold.

Barrick president and chief executive Jamie Sokalsky said: "These discussions were part of our ongoing efforts to identify opportunities to optimize our portfolio, however we are approaching this in a prudent and disciplined manner and will only proceed with opportunities that generate acceptable value for Barrick.

"African Barrick Gold's assets hold significant potential, and we will continue to look for ways to best realize that value for our shareholders."

Westhouse Securities has retained a 'neutral' rating for African Barrick Gold but reduced its target price for the stock from 195p to 180p despite the company pleasing the market with its first-quarter report on Thursday.

Deutsche Bank comment:
We believe African Barrick has the right management and plans to deliver the cost and capex cutting started in 2013, and to drive down All-In Sustaining Costs. The group has responded very well to the ‘back against the wall’ moments of 2013, and we expect it to announce more cost cutting measures, focused on mining efficiencies, at its forthcoming FY13 results. In the weak gold price environment which we expect into the medium-term, ABG will need to work hard to maintain a margin post sustaining costs, in particular, through delivery of its grade improvement plans. Hold on balanced risk/reward.
ABG released strong production and cash cost results for FY13. Full year group production was 641.9koz, up 5.4% y/y, and 3% higher than our forecast for 623koz. The strong end to the year was driven by a 10% q/q improvement in grades at Bulyanhulu, as expected, offset somewhat by planned lower grades at Buzwagi and planned plant downtime at North Mara. Cash costs for FY13 of US$827/oz were well below the company’s guidance for US$925/oz and DBe US$904/oz, on the higher production and cost cutting. All In Sustaining Costs were US$1,362/oz for the year, clearly above the current gold price, but 4Q13 AISC did drop down to US$1,171/oz, due to ongoing cost cutting efforts. Group net cash stood at US$282m at the end of the year, higher than our estimate of US$152m.
ABG is aiming to take US$185m out of its cost base by end 2014, and today it indicated that it has cut more than US$100m by end 2013 – in particular, it is ahead of plan in cutting corporate admin and exploration costs. The group’s efforts in bringing AISC down for a fifth successive quarter, to US$1,171/oz in 4Q13, down 8% q/q, testify to the success of the plan so far. When it reports FY13 prelims on 12 February, we expect African Barrick will target a further cut to its cost base, from focusing on the mining cycle to drive up mining efficiencies. Our 2013e EPS increases substantially on the better results, given the operational gearing within the group. For 2014e, we have made one change to our forecasts, increasing grades at North Mara from 2.4g/t to 2.9g/t in line with ABG’s guidance.
Our 12-month TP is based on 0.8x our end- 2013E NAV, applying a WACC of 5% to a life of- mine DCF model. Key risks include higher-/lower-than-expected gold prices, lower-/higher-than-expected costs and Tanzanian Shilling."

Canaccord note:
"We maintain a HOLD and 180p target price (Edited), which is based on 0.98x NAV at Canaccord Genuity’s forward gold price deck."

HARRY , i was in and out of these last year ,the target i found for Canaccord is 180p am i missing something ?

No, I think that must be a typo! Why rate as a hold but predict a doubling of the sp? Maybe they meant 210p? I will have root around to see if that is shown on the Digitallook site.

As you say jimmy, 180p is their target. I will correct the post.

30p below where they are now . I was looking on DigitalLook also..

HSBC downgrades African Barrick Gold from neutral to underweight, target cut from 200p to 160p.

RBC Capital Markets retains outperform on African Barrick Gold, target increased from 220p to 250p

Moving up strongly this morning. Was given on the chart thread over the weekend.

11 March 2014

African Barrick Gold plc (the "Company" or "ABG")

Completion of Placing by Barrick Gold Corporation

ABG notes the announcement by Barrick Gold Corporation ("Barrick") that it has
completed the sale of 41 million shares, representing 10% of the issued share
capital of ABG, and has entered into a lock-up agreement for its remaining
holding for the next 120 days. This transaction is consistent with Barrick's
ongoing portfolio optimisation strategy. Following the transaction, Barrick's
holding in ABG is reduced to 63.9%.

Commenting, Brad Gordon, CEO of African Barrick Gold said "This is a positive
step by Barrick which significantly increases our free float. The placing is a
reflection of the increased interest in the business as a result of the
progress we are making as we continue to drive improved operational delivery
from our high quality asset base."

Canaccord sees buying opportunity at African Barrick Gold after sell-off
12 March 2014 11:24

The 17 per cent share price slump of African Barrick Gold (ABG) has created a buying opportunity, according to Canaccord Genuity on Wednesday.

The broker kept a 'buy' recommendation and 315p target price for ABG.

Shares fell sharply on Tuesday after parent company Barrick Gold disposed of 41m shares - representing a 10% stake - to lower its holding to 63.9%.

"We believe the magnitude of the price drop was exacerbated by the profit taking following the best performance among UK peers since mid-2013. The fall we think opens up a buying opportunity," said analysts Dmitry Kalachev and Peter Mallin-Jones.

Among their key reasons to buy the stock, the analysts highlighted free cashflow (FCF) which is expected to average $230m per annum between 2015 and 2020.

This translates into a FCF yield of 13% which is the highest among ABG's London-listed peers under Canaccord's coverage. Adding growth projects would see FCF rise to $280m per annum at a 16% yield.

They also pointed to a robust balance sheet, strong production growth and easing upwards pressure on costs.

Addressing recent speculation that Barrick Gold could move to sell-down its remaining stake, Kalachev and Mallin-Jones said ABG now represents only 7% of the parent company's annual production so even a total disposal of the entire 63.9% stake will improve Barrick's costs by only around 2%.

"The sale at any cost in order to improve cost profile looks out of the question and this, we think, reduces the overhang risk from the remaining stake," they said.

The stock, which hit a low of 229.3p in early trading on Wednesday, had trimmed losses to trade just 1.4% down at 246.5p by 11:45.

BC

Related Companies: ABG

Shakeup at ABG

ABG update

StockMarketWire.com
African Barrick Gold's third quarter revenues rose to $241m, 9% up on last year, as higher sales volumes more than offset lower average realised gold prices.

Earnings before interest, tax, depreciation and amortisation rose by 17% to $76m due to increased revenue and lower cash costs.

Gold production was 16% up at 190,986 ounces and gold sales were 11% higher at 178,490 oz.

Chief executive Brad Gordon, said the increase in output was further evidence that the changes being implemented continue to improve performance.

He added: "As a result we have delivered our eighth successive quarterly reduction in all-in sustaining costs (AISC).

"During the quarter we generated US$17 million in net cash flow and have now increased our cash balance year to date, after returning US$14 million in dividends to our shareholders and continuing to invest in growth.

"The optimisation of our assets continues with good progress made during the quarter on the projects at both Bulyanhulu and North Mara and we are looking forward to setting out our longer term plan for the business at our Investor Day on 27 November."

Westhouse Securities reiterates add on African Barrick Gold, target raised from 230p to 240p.

StockMarketWire.com
A General Meeting of African Barrick Gold was held on 26 November 2014 to consider a Change of Company Name to Acacia Mining plc which, if passed, would take effect as of 27 November 2014.

The final voting figures of the poll as certified by the scrutineers, Computershare Investor Services, showed that 100% voted in favour of the Special Resolution.