LSE-listed African Barrick Gold (ABG) achieved strong performances at its North Mara and Buzwagi mines during the quarter ended March 31, 2013, which offset the temporary operational issues experienced at Bulyanhulu and the impact of the cessation of mining activities at Tulawaka.
Attributable production for Tanzania’s largest gold producer increased by 1 percent from 144 643 oz in the first quarter of 2012 to 146 105 oz in the first quarter of this year, which CEO Greg Hawkins described as a “good start” to the year.
“Despite an expected slow start at Bulyanhulu, we remain on track to achieve full-year guidance as we continue to deliver on our mine plan, while progressing the operational review,” he commented, adding that a higher grade profile at North Mara and improved throughput at Buzwagi had driven production.
Mining Weekly Online reported in January that ABG parent company Barrick Gold had embarked on an operational review of the Tanzania-based operations, which included an asset review based on cash flow generation, as opposed to scale, value-accretive production, cost and organisational structure.
Gold production at Bulyanhulu of 38 036 oz was 38 percent lower than in the comparable period in 2012, primarily owing to lower mined grades as a result of paste fill delays and the impact of a reduced workforce.
While head grade at Buzwagi was 13 percent lower than the prior year, as ABG renewed its focuse on waste stripping, increased recovery rates and improved mill throughput rates drove production of 40 020 oz, a 10 percent increase from the prior year period.
At North Mara, mining from the higher-grade zones in Gokona continued during the quarter, resulting in an increased head grade of 3.6 g/t, up 71 percent on 2012.
Mill recovery rates at the operation increased by 10 percent to 87.3 percent mainly as a result of the gold plant upgrade completed in 2012 and further aided by the higher-grade mill feed, which pushed production for the quarter up 83 percent to 64 704 oz.
“At Tulawaka, production for the quarter amounted to 3 346 oz, which was a 70 percent drop on the 2012 period, as underground operations came to an end, resulting in lower tonnes milled,” Hawkins said.
The decision to bring Tulawaka to an early close was made with the intention of removing higher-cost ounces from the portfolio and improving ABG’s return profile.
ABG had submitted the mine closure plan to the relevant government departments and discussions regarding the ultimate use of mine infrastructure were expected to continue into the second half of the year.
Meanwhile, cash costs of USD71/t milled for the quarter increased by 6 percent on 2012, while gold sales amounted to 148 232 oz – 2 percent higher than production, as concentrate on hand at Buzwagi at the beginning of the year was shipped during the quarter.
Revenue of USD 254.6-million was 5 percent lower than that of the first quarter of 2012, as increased sales volumes were offset by a 5 percent decrease in the realised price of USD1 611/oz sold, compared with USD 1 697/oz sold in the prior year.
Earnings before interest, taxes, depreciation and amortisation of USD 81.9-million were 16 percent lower than in the 2012 period, driven chiefly by lower revenue and an increased direct cost base, offset by lower corporate administration and exploration and evaluation costs.
Similarly, net earnings and earnings a share also declined in the first quarter, both dropping by 49 percent to USD 20 716 and 5.1c respectively.
Ends.
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