African Barrick Gold reports 'good progress' with operational review

African Barrick Gold (ABG) has reported 'good progress' with its operational review, which was initiated in the first quarter to enable the company to deliver robust returns and cash flow over the long term and in the current gold price environment.

The review is focusing on five key areas, namely operating costs, capital costs, organisational structire, corporate overheads and mine planning.

So far the group has implemented a $50m reduction in its sustaining capital, a reduction of $25m in its exploration spend, and $8.0m of savings in its corporate overheads.

Chief Executive Officer Greg Hawkins said: "After a challenging period in 2012, it has been encouraging to hit our targets in the last two quarters. We have made significant improvements to the Buzwagi operation, while North Mara is performing well and Bulyanhulu is on track for recovery.

"We are making good progress on cost reductions through the operational review and we are well underway with a complete life of mine review of the assets.

"We have moved to shut our high cost mine at Tulawaka, are on track with our expansion project at Bulyanhulu and are determined to ensure that ABG can generate robust cash flows over the long term."

The group also said it is reassessing its staffing requirements, and has so far reduced the level of international employees by 16%, which it said "substantially lowers the turnover in our workforce and improves the cost profile, and this is an area where we will continue to work to make further improvements".

The company added that, given the recent movements in the gold price, scenarios are being run at different gold prices in order to ensure maximum flexibility at various potential price levels.

NR