LONDON: African Barrick Gold raised production in 2013 for the first time in five years and expects output to rise further after posting an annual net loss of $781 million on Wednesday hurt by a plunge in gold prices.
The loss for the Tanzania-focused FTSE 250 company compared to a profit of $62.8 million a year earlier and reflected a $823 million impairment charge mostly due to lower gold price assumptions and mine planning changes.
Like many other gold producers, African Barrick has been hurt by a plunge of 28 percent or nearly $500 an ounce in gold prices last year.
Many producers have shelved projects, reduced overheads and put non-core assets on the block as a result.
African Barrick was under pressure even before the plunge in gold prices last year, hit by illegal mining, power generation problems and strikes.
Under Chief Executive Brad Gordon, who was appointed in August, the company is undertaking steps to overhaul the business, by cutting costs and boosting production.
It said on Wednesday it produced 641,931 ounces of gold in the year to December 31, up 3 percent.
It is targeting output of 650,000 to 690,000 ounces in 2014.
It also managed to cut its all-in sustaining cost, a widely used measure which includes elements such as exploration, by 14 percent to $1,362 per ounce in the year, which is still above a current gold price of around $1,290.
More cost cutting will come in the next two years from improving mine operations, the company said.
"ABG completed a generally good 2013 in terms of its operational response to the lower gold price," Citi analysts said in a note.
"It is now a trimmed-down and focused group with a good cash balance, which puts it in a good position at the current gold price."
Shares in the company were down about 4 percent in early trading.
The miner's 2013 core earnings before interest, tax, depreciation and amortisation (EBITDA), beat analysts' expectations at $240 million, although were down from $331 million a year before. (Reuters)