African Barrick attracts interest from China Gold

The holding company of African Barrick Gold (ABG) is in talks with China National Gold Group about the possibility of selling its stake in the London-listed miner to China's largest gold producer.

Barrick Gold, which currently owns 73.9% of ABG, has confirmed that it is in preliminary discussions with China National Gold, but there can be no certainty that these talks will result in an offer for its holding in ABG.

Should China Gold buy up more than 30% of the voting interest in ABG, it would then be required to make an offer for the whole of ABG's issued ordinary share capital.

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ABG said in July that first-half gold production, revenue and profits were all down year-on-year. Attributable gold output sank 14% on the back of expected lower grades mined at Buzwagi, waste stripping at North Mara and batch processing at Tulawaka.

Meanwhile, cash costs per ounce sold jumped 43% to $938 on the year, due to lower production, higher energy costs and industry-wide cost pressures.

Over the past year, ABG's shares - which closed on Wednesday at 393.60p - have fallen 25.88% over the last year.