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.

"today"???? ...... i thought trading started on monday, which would certainly make more sense

anyway, i would have thought a good one to buy at the open

Cant disagree there Harry ..... l made a vain attempt to get in @ the very start OF trading > The previous evening l phoned a friend @ Teathers to get me in at the VERY start of trading..He could indeed,But a derisory amount and by 8-01 and before i could even reply to the the offer the s/p had been cranked up from 550p to a tad shy of 590 upon farcical volume . So i waited. Sure enough, and as l fully anticipated, as i suspect you did , the quick profit banditos starting selling and the s/p fell back.Was fun - reminded me of one of the brits 80,s privitizations when i was ay school in UK. Anyway i confidentally dipped in the big toe @ 575p - After what highly foccussed research i had time to do l formed the conclusion that even 590p was splitting hairs in relationship to its fair worth. lf ABG deliver it will equal POG as a bellweather -At least !! Anyway forget my blatent ramping- but i do believe its worthy of your investigation .....ONE for after the election Harry Only unpredictability ahead mon pote ..lncidentally, since taking a position, and thus given more time to research ABG the more and more confident i have become. And what with Barricks Corps holding 75% of stock its hardly going to be in fiscal trouble - touring the city .,,@+.J

why did the SP dive after what looked like a good update? is it just following market sentiment or have i missed something?
If i haven't missed anything then looks a nice price to dip ones toes.
As always DYOR
Alex

Keep on selling ABG to 300p... now 398p.

chart is a stinker ..... what did ABG do wrong?

Lots of operational problems including theft of deisel from a mine site on an industrial scale!

sounds like the site management should be sacked

cynic

Heard anything from TFC ?

Short this with all u can

currently in Rio on biz ..... no, not heard a peep ... wonder what has happened to him and ditto tabby

Citigroup note:
When is a Super Tax not a Super Tax? Tanzanias parliament yesterday approved a 5-year development plan backing the proposed introduction of a super-profit tax on mining companies. On Sunday, the country's mining minister clarified that Tanzania would not impose the new tax (no details provided) on existing companies but would negotiate with the companies to have them pay voluntarily. Both Anglogold and African Barrick have recently argued that their tax agreements with the state are watertight and should not be subject to the super tax

The government seems to have acknowledged this and said it wont impose a super tax but will enter into discussions with miners about a voluntary tax payment. The government statement said, "We will not impose the proposed super profit tax on existing mining companies. If implemented, we will have to negotiate it with the companies because they already have agreements in place with the government." There is much confusion.

Our estimated NPV (10% WACC, gold declining to $950 over the next few years) for ABG is 4.14 and ABG is currently trading at 3.99, well below its IPO price 14 months ago of 5.75 (when gold was trading at $1350, not todays $1520). This process of consultation between the government and the miners is likely to drag on and until then ABG will likely trade at a discount to the 1.5x P/NPV that we think it deserves. However, a discount to NPV seems excessive to us, even in the light of the tax.

Buy ABG at 454p... very cheap now.

Selftrade have a 705p price target, which looks a bit optimistic, imo.

.

Nows the time to get on board ABG as it falls back a little, wont last. Itl be well up by the days end. P/E of just over 10 to 2012, totaly barmy.

Full Broker backing....

African Barrick Gold PLC

FORECASTS 2011 2012
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

SG Securities
27-07-11 BUY 42.03 5.86 65.98 6.71
Westhouse Securities
27-07-11 ACCU 275.80 42.60 11.30 306.30 49.70 9.70
Broker Name Withheld 3
26-07-11 BUY 226.62 39.55 3.38 300.93 52.88 3.38
Numis Securities Ltd
26-07-11 BUY 241.36 39.92 4.30 289.87 49.13 5.53
Canaccord Genuity Ltd
25-07-11 BUY
Edison Investment Research
11-07-11 None 229.58 38.94 242.50 41.14
Charles Stanley
08-03-11 HOLD

2011 2012
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)
Consensus 244.07 40.68 6.22 287.04 52.20 6.33

1 Month Change 8.62 -2.04 3.00 23.01 3.70 2.60
3 Month Change 0.43 -3.06 2.62 14.16 2.40 2.31


GROWTH
2010 (A) 2011 (E) 2012 (E)
Norm. EPS 281.53% 15.97% 28.33%
DPS % 503.40% 1.92%

INVESTMENT RATIOS
2010 (A) 2011 (E) 2012 (E)

EBITDA 199.39m 314.39m 402.19m
EBIT 199.39m 239.45m 320.33m
Dividend Yield 0.19% 1.16% 1.18%
Dividend Cover 34.05x 6.54x 8.24x
PER 15.31x 13.20x 10.29x
PEG 0.05f 0.83f 0.36f
Net Asset Value PS 351.18p 411.90p 471.55p

Hemscott Premium

Morgan Stanley note:
"Gold producers to benefit the most: We increase our PTs for both African Barrick Gold (OW) and Randgold (UW) by around 30% to reflect the significant uplift in gold price forecasts. We expect earnings to grow by >95%, thus projecting both companies to deliver sector-leading earnings growth in 2012. While both would benefit from higher gold prices, ABG remains our relative top pick on valuation and operating leverage."

Dan Coatsworth in this week's Shares Mag:
"THE GOLD PRICE sell-off witnessed in September may be shortlived,which makes miner African Barrick Gold (ABG) a solid buy at 522p. Gold has fallen three places down the commodity ranking (see Top 10 commodity movers chart, page 10) because the US decided not to print more money to stimulate its economy, instead choosing to implement its Operation Twist programme to buy long-term US government bonds, or treasuries.
Quantitative easing drives the gold price, so the absence of this action served to pull down the shiny metal, which has also been hit by three margin requirement hikes from the metals and energy exchange operator CME since August. Yet the market remains concerned Europes sovereign-debt crisis will not be resolved anytime soon and there are growing signs the US is heading back into recession. These factors should serve to remind investors about the haven appeal of gold. African Barrick should this year produce 701,000 ounces of gold and end the fiscal period with $700 million cash. Production is set to rise from 2012 and costs are expected to fall.
Shares says: The US policy fudge does not alter our bullish stance on gold, so trade it through African Barrick Gold shares at 522p.

Possibly worth a punt if & when it goes sub 500p, imo.

7th December, 2011

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

First day of trading on the Dar es Salaam Stock Exchange

Further to the announcement made on 18th November 2011, African Barrick Gold is
pleased to confirm dealings in the ordinary shares of ABG on the Dar es Salaam
Stock Exchange will commence today. Trading will take place in the form of DSE
Depository Receipts and further information on trading mechanics can be found
in ABG's information memorandum.

StockMarketWire.com
African Barrick Gold has completed the full implementation of additional diesel generated back-up power at its Buzwagi mine.

This will provide full back-up power in the event of disruptions to grid electricity supply.

African Barrick Gold points out that, as it has previously reported, there have been significant and continual power disruptions throughout Tanzania this year, significantly reducing the expected levels of power supply.

The installed generating capacity in Tanzania amounts to approximately 1,000 MW, of which close to 50% is generated by hydropower.

As a result of the broader drought conditions experienced in East Africa this year, the availability of this hydropower has been severely limited, placing significant strain on the network and leading to regular power outages.

This has been exacerbated by maintenance work on the transmission network as well as on gas pipelines feeding the network.