LONDON, July 27 (Reuters) – African Barrick Gold (ABG) (ABGL.L), which floated in London this year, has cut its full-year production guidance due to delays in accessing higher grade from its new Buzwagi mine in Tanzania.
It expects to produce 750,000-800,000 ounces of gold for the year, at a cash cost of $500-550 an ounce, down from its 800,000 to 850,000 ounce target.
ABG’s chief executive told Reuters in June that production this year would likely end up at the low end of its 800,000 to 850,000 ounce target after a slow ramp up at its new Buzwagi open pit mine. [ID:nLDE65L22D]
On Tuesday, the FTSE 100 miner said first-half attributable production was 356,208 ounces, up 23 percent year-on-year, at cash costs of $529 per ounce.
The miner reiterated that it expects higher grade primary sulphide ore to be increasingly mined in the second half and for production to rise at Buzwagi.
First-half net income jumped 217 percent from the year-earlier period to $99 million and the company said it plans to pay an interim dividend of 1.6 cents per share.
Shares in the FTSE 100 group closed on Monday at 550 pence, just below the IPO price. Gold prices XAU= rose 13 percent in the first half of 2010 to touch a record $1,264.90 an ounce in June on concern over euro zone sovereign debt levels. [GOL/]
The market has viewed the company, which has four producing gold mines in Tanzania, with some caution compared to its rivals and is looking for African Barrick to establish a track record of organic growth or make an acquisition elsewhere in Africa.
ABG, spun off on March 19 from its Canadian parent Barrick Gold Corp (ABX.TO), the world’s largest gold miner, after raising 581 million pounds via an initial public offering at 575 pence a share.
Barrick Gold will announce its second-quarter results on Thursday. [ID:nN22125838]
(Reporting by Julie Crust; editing by Rhys Jones)
Bullion Update and Market Outlook: Nirmal Bang
Precious metals extended the loss on Friday on Comex as dollar strengthened sharply against Euro after the comment from ECB president gave a hint they might cut interest rate by quarter basis points led to correction in precious metals.
The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings fell to 1,105.98 tonnes as of April 17, down 13.45 tonnes or 1.2 percent from the previous day. It was the biggest one-day decline since Oct. 3.
The dollar neared a one-month high against the euro with the single currency under selling pressure due to uncertainty over what policy steps the European Central Bank will take next.
ECB President Trichet signaled the bank’s likely next move, saying it could cut its interest rate but only by an additional 25 basis points. Noncommercial net long positions in gold futures listed in New York rose to 129,895 lots as of April 14, up from 127,812 lots a week earlier, weekly report by the Commodity Futures Trading Commission showed.
Gold and silver both expected to trade sideways to down during the day. Strengthening dollar and equity markets might go gainst precious metals and we might see precious metals trading down during the day. If tonights leading indicators reports turn out to be better than expected then we might see further correction in precious metals.
We have seen that Gold has made a double bottom formation at $864/oz, breaching that we might see Gold prices even testing $850/oz.