African Barrick Gold (ABG), the Tanzania-focused gold producer, saw production drop 11% in the final three months of last year compared to the same period of 2010.
The amount of gold it actually sold dropped a full 21% over the quarter.
Explaining the sharp declines ABG's Chief Executive, Greg Hawkins, said the unreliable power supply in Tanzania was to blame. The company has now installed a 16 megawatt back-up generator to prevent outtages.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The full-year figures for ABG look better, but production was still down 2% on 2010 and sales fell 3%.
The firm has had one major factor in its favour, however, the gold price has gained 28% over the last 12 months, 19% in the last quarter alone.
ABG confirms this has had a significant impact on earnings, with the cash position at around $584m by the end of 2011.
Over the last 12 months ABG's share price has dropped 18%. News of the production decrease has seen the stock drop sharply in very early trading, at 8.06am it was down 2.7%.
BS
