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Tuesday, July 27, 2010

African Barrick Gold (LON:ABG) Generates Profit, Lowers Guidance

African Barrick Gold (LON:ABG) generated earnings of $99.2 million in the first half, a gain of over 200 percent over the first half of 2009, where they had a profit of $31.3 million.

Revenue for the quarter also has significant gains, reaching $423.8 million, or 68 percent. Last year they had revenue of $258.8 million.

The bad news is production guidance was lowered for the entire year, based on delays in accessing higher-grade primary ore at its Buzwagi project, in Tanzania.

Consequently, they lowered the production range from 800,000 to 850,000, to 750,000 to 800,000. Operational cost estimates were also raised from $450 to $500 a ton, to $500 and $550 a ton.

This will cut into revenue, earnings and margins for the rest of the year.

African Barrick Gold was spun off from Barrick Gold (NYSE:ABX) earlier this year.

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