* Interim dividend doubled to 3.2 cents per share
* H1 gold output in line, keeps full-year target
* Shares up 2.2 pct to two-month high (Adds interview with CEO, analyst comment, share price)
By Julie Crust
LONDON, July 26 (Reuters) - African Barrick Gold posted forecast-beating output and a 54 percent jump in second-quarter income, despite setbacks including an armed attack on one of its mines, as it rebuilds investor confidence after a damaging target miss last year.
Net income rose to $69.8 million in the three-month period, as revenue climbed 39 percent, helped by higher gold prices. The Tanzania-focused miner also doubled its interim dividend on Tuesday to 3.2 cents a share.
African Barrick is looking to shore up investor confidence left shaken after it missed a 2010 production target even after it cut guidance. It has since reported damaging security breaches at one mine and a mill failure at another.
“From our point of view, 2011 is critical for us to meet the expectations we set out there and rebuild the confidence that was perhaps shaken a bit through the issues in 2010,” Chief Executive Greg Hawkins told Reuters on Tuesday.
The miner, a unit of the world’s largest gold miner Barrick Gold Corp , said it was confident for the second half and retained its forecast to produce between 700,000 and 760,000 ounces of gold this year, up from 701,000 ounces in 2010, at a cash cost of $590-650 an ounce.
Production in the second quarter, which saw a mill failure at its Buzwagi mine and an attack on its North Mara operation, fell 4 percent from the year-earlier quarter to 171,950 ounces.
However, that figure was above analysts’ expectations. Canaccord Genuity had forecast second-quarter output of 159,000 ounces and Numis Corp had anticipated 150,000 ounces.
“(A) very positive set of operational and financial results in our view given the mill failure at Buzwagi and a security incident during the quarter,” said analysts at Canaccord, adding they believed the discount over North Mara and Buzwagi was significantly overdone.
At 0913 GMT, the shares were up 2.5 percent at 501.5 pence, outperforming a British mining index .
African Barrick’s shares have surged 30 percent since the middle of June as London-listed gold stocks have started to play catch up with stronger gold prices. Spot gold rose to a record $1,622.49 an ounce on Monday.
The company remains positive on the outlook for gold, which has risen on concerns over the U.S. debt ceiling and the euro zone debt crisis, with Hawkins upbeat about its underlying strength.
African Barrick said it plans to spend $20 million on additional security infrastructure, such as building surrounding walls and CCTV, at Buzwagi and North Mara.
Seven people were killed after hundreds of people raided its North Mara mine in May, one of a number of attacks on the project, in an attempt to steal gold.
It has also submitted documentation for the renewal of its mining licence at North Mara and is awaiting the formation of a mining advisory board to approve it.
“It should be an administrative formality, but it’s the first time that anyone has actually done it,” said Hawkins. ($1 = 0.614 British Pounds) (Editing by Clara Ferreira-Marques and Sophie Walker)