African Barrick Gold Cuts 2010 Output Target After Oil Theft

U.K.-listed African Barrick Gold PLC (ABG.LN) Thursday said it has lowered its full-year gold output guidance after it was forced to suspend a large portion of its mining department due to the discovery of systematic onsite fuel theft.

The company is now anticipating full-year gold production on a par with the 716,000 troy ounces of gold produced in 2009, down from the 750,000 ounces to 800,000 ounces previously disclosed at the company's interim results.

"We have recently uncovered an organized and systematic onsite fuel theft which has impacted production at Buzwagi," the company said, referring to its Tanzanian gold mine. "Investigations into this matter indicate that criminal fuel theft syndicates have widely infiltrated our mining department."

African Barrick Gold, which is majority owned by Barrick Gold Corp (ABX), suspended 60 employees and a number of contractor representing over 40% of the mining department due to fuel theft. The suspension has delayed mining of higher grader ore and forced the company to process low grade stockpiles.

The incident will reduce full-year production at the company's Buzwagi mine by about 30,000 ounces.

"Despite the short-term impact on production, these actions were necessary to maintain the integrity of the operating environment at Buzwagi. It should also be noted that the lower production levels are temporary as a result of mining the low grade stockpiles and that the total ounces expected to be produced over the life of mine remains unchanged," the company said.

African Barrick Gold's shares Wednesday closed up 14.5 pence or 2.4% at 623.50 pence a share.

-By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; alex.macdonald@dowjones.com

Barrick Gold (NYSE:ABX)
Historical Stock Chart
From Dec 2024 to Jan 2025