UPDATE 1-African Barrick review given fresh impetus by gold rout
LONDON, April 18 (Reuters) - Miner African Barrick Gold , the subject of a failed takeover attempt in January, said that this week's plunge in the price of gold has raised the stakes for its internal operational review.
The Tanzania-focused company, which has underperformed its rivals on the stock market and repeatedly cut output forecasts, initiated the six-month review earlier this year after parent Barrick Gold's failed attempt to sell the business to a Chinese buyer.
"The past week, if you like, has given us a little bit more impetus," Chief Executive Greg Hawkins said when asked about the review on Thursday.
The price of gold hit a two-year low on Monday with its biggest one-day drop since 1983, damaging bullion's status as a safe-haven investment and emphasising the plight of mining companies battling operational troubles on the ground and soaring costs.
"We kicked that (operational review) off because we knew we had to restructure the cost of the business to give us some comfort if the gold price came off, or to create a bigger margin if they (gold prices) sustained at that level," Hawkins said.
The CEO added that he believed the company had "a head start" for managing any new gold-price environment because the review was already under way, helping it to be flexible with its mining plans should the price continue to fall.
The review is due to be completed in July at the time of the company's interim results.
African Barrick, which had warned that production would shrink for a fifth straight year, on Thursday posted first-quarter production ahead of analyst expectations. Continued...