UPDATE 2-African Barrick disappoints as output to shrink again

Wed Feb 13, 2013 7:12am EST
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* Operation review to focus on cutting operating costs, improving returns

* 2012 EBITDA down 39 pct vs 2011, misses expectations

* Guides that 2013 production will come in lower, costs steady

* Shares fall 8.7 pct

By Sarah Young

LONDON, Feb 13 (Reuters) - Miner African Barrick Gold forecast production would shrink for a fifth straight year and said it would focus on cutting soaring costs, after talks over a possible takeover of the firm collapsed in January.

The Tanzania-focused FTSE 250 company forecast on Wednesday that gold output could fall as much as 14 percent this year, sending its shares down over 9 percent, after 2012 earnings missed market expectations.

"Another disappointing result from a serial disappointer," Numis analyst Cailey Barker said.

Detailing the first findings of an operational review, initiated in the wake of parent Barrick Gold's failed attempt to sell the company, African Barrick said it plans to cut back on spending. It will investigate ways of reducing power and other operational costs as it seeks to work its assets harder to boost cash generation through this year.   Continued...