African Barrick Gold Swings To 4Q Profit, Eyes Africa Acquisition

Anglo-Tanzanian miner African Barrick Gold PLC (ABG.LN) said Wednesday that it swung to a net profit in the fourth quarter while full year output in 2010 fell below its forecasts due to problems at one of its mines.

The Africa-focused gold miner said it expects output this year to be higher and it plans to grow through its own operations and through acquisitions in Africa.

The miner said it has a capital expenditure budget of $140 million and $24 million for expansion projects. It's also increasing its exploration budget in 2011 to $55 million, a doubling of 2010 expenditure.

"For 2011...[we are] continuing to advance our portfolio of growth projects and assess other opportunities to expand our asset base," said chief executive Greg Hawkins.

African Barrick Gold's parent company is Canadian miner Barrick Gold Corp (ABX).

MAIN FACTS:

-Fourth quarter sales up 6% on year at 724,083 troy ounces.

-Full year 2010 gold production down 2% compared to 2009 at 700,934 ounces, due mainly to production issues at its Buzwagi mine.

-Forecasts 2011 production between 700,000 ounces and 760,000 ounces.

-At the end of October, African Barrick Gold forecast 2010 full year output to be on a par with 2009 output of 716,000 ounces, down from its previous guidance of 750,000 ounces to 800,000 ounces. African Barrick Gold cut its guidance multiple times in 2010 due to issues at Buzwagi.

-Full year 2010 cash costs rose 7% on the year to $569 an ounce due to a combination of industry costs, lower-than-expected production and spending at Buzwagi.

-The miner forecasts cash costs in 2011 to be between $590/oz and $650/oz of gold sold and operating cash cost of $545/oz to $605/oz of gold sold.

-Fourth quarter revenue was up at $309.52 million compared to $229.62 million in the fourth quarter of 2009.

-Ebitda in the fourth quarter was up at $133.65 million compared to $68.58 million the year before.

-African Barrick Gold swung to a net profit of $79 million compared to a loss of $15.98 million the year before.

-African Barrick Gold was spun off from Barrick Gold, its parent company, in March last year and it holds four gold producing mines in northwest Tanzania--Bulyanhulu, Buzwagi, North Mara and Tulawaka. Barrick Gold still retains a 75% stake in the London-listed miner.

-Spending in 2011 is planned for a water treatment facility at North Mara, the addition of pebble ports and back-up generating capacity at its Buzwagi process plant, additional underground mining equipment for Tulawaka and continued security investment.

-By Devon Maylie, Dow Jones Newswires; +44 (20) 7842 9483; devon.maylie@dowjones.com

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