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)