BY BUSINESS REPORTER
TANZANIAN and London listed company , African Barrick Gold (ABG) said on Wednesday it produced about 2% less gold in 2011, than in 2010, with output falling to 688 278 oz.
This came on the back of attributable gold production for the fourth quarter totalling 160 020 oz, an 11% decrease when compared with 179 730 oz produced in the same quarter of 2010.
The miner blamed the continuous power disruptions it experienced in Tanzania and the planned lower production at its North Mara project, where it continued to process lower-grade stockpiles as a result of a waste-stripping programme, for the decrease in production.
Ounces sold for the quarter totalled 158 869 oz, 1% lower than the production figure and a decrease of 21%, when compared with 201 298 oz sold in the corresponding quarter of 2010, where the delayed sale of concentrate at Bulyanhulu from the previous quarter lifted sales.
“Continual power disruptions adversely impacted production at three of the four sites resulting in additional plant downtime and maintenance shutdowns from excessive wear on critical components,” ABG said in a statement.
However, gold sales for the full year exceeded production by 11 261 oz, at 699 539 oz, the result of the miner’s continued focus on reducing concentrate inventories and receivables before the year-end, driving the net cash position to about $584-million at December 31. The increased average realised gold price of $1 655/oz over the fourth quarter, and $1 587/oz for the full year also had a positive impact on cash flow and earnings.
It did, however, experience increased full-year production at its Bulyanhulu, Buzwagi and Tulawaka operations. Full-year total cash costs per ounce of gold produced were expected to be in line with guidance of $675/oz to $700/oz.
“The underlying performance of each of our assets has improved over the year with three of the four mines achieving production increases, and we are especially pleased with the performance from Tulawaka in 2011.
“During the quarter our output was impacted by the power situation in Tanzania, but as we go into 2012, we will benefit from our investment in additional back-up power generation and are well positioned to continue delivering on our potential to generate significant cash flows from our assets," CEO Greg Hawkins said in a statement.
The company’s Buzwagi and Bulyanhulu operations had been the most severely impacted by the power outages and ABG estimated an overall combined production loss of about 20 000 oz for the quarter. The overall production losses for the year from power-related issues were expected to amount to between 35 000 oz to 40 000 oz.
At Buzwagi, ABG commissioned a further 16 MW of diesel back-up power generators, which, when combined with the 5 MW of generators installed in July, provides full back-up power to the operation. At Bulyanhulu ABG continued to upgrade back-up power facilities.
ABG increased its mining capacity for the fourth quarter, mining 10.5-million tons, when compared with 9.8-million tons mined in the same quarter of 2010. The increase was mainly driven by higher waste stripping at Buzwagi and Tulawaka.
“Stage 2 waste stripping drove the increase at Buzwagi, whilst Tulawaka ramped up prestripping of the west extension of the openpit, in order to provide additional mill feed,” ABG said.
The miner reported that Tulawaka performed above expectations and produced more gold than in 2010 as a result of the higher mine grade from underground operations.
Waste stripping at North Mara was impacted by constraints at the potentially acid-forming waste dumps. The miner processed about 1.7-million tons in the quarter, which were 15% below the corresponding quarter of 2010, when it processed two-million tons. The decrease in ton milled was as a result of power interruptions and resulting plant downtime at Buzwagi.
The average grade processed for the quarter was 3.3 g/t, which was 3% higher than the prior year of 3.2 g/t. The increases in grade at Tulawaka and Bulyanhulu were partially offset by the planned processing of lower-grade stockpiles at North Mara.
Copper production for the quarter was 2.9-million pounds, 23% lower than the previous year when 3.8-million pounds of copper were produced. This was mainly driven by the decrease in production at Buzwagi and Bulyanhulu when compared with the same quarter in 2010.
ABG said it continued with exploration at the Nyanzaga project, with an updated resource expected in the first quarter of this year.
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