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13th February 2013
2012 Preliminary Results
African Barrick Gold (ABG) announced its 2012 Preliminary Results at 0700 on Wednesday 13 February
"As we progress through 2013, we are focused on reducing our cost base from current levels to ensure the business returns to delivering appropriate levels of free cash flow,” said Greg Hawkins, Chief Executive Officer of African Barrick Gold. “Cash flow generation and improving returns from our assets form a key part of our operational review and we will update on our progress throughout the course of the year. The 2012 dividend is maintained at the 2011 level and this is both an expression of our confidence in the business as well as our commitment to shareholder returns."
Full Year 2012 Highlights
ABG reports net earnings of US$59 million (US14.5 cents per share), including one-off adjustments of US$46 million, primarily due to impairment charges related to Tulawaka which, after a long and successful run, is coming to a close in 2013. Adjusted net earnings2 were US$105 million (US25.7 cents per share) and operational cash flow was US$258 million.
Other significant highlights include:
- Gold production1 of 626,212 ounces and Cash costs2 of US$949 per ounce sold, were within recent guidance
- Revenue of US$1,087 million and EBITDA2 of US$331 million
- Continued progress on the CIL Expansion and Upper East Acceleration, our key expansion projects at Bulyanhulu
- Renewal of the North Mara Special Mining Licences on the existing terms and conditions for a 15 year period
- Highly prospective exploration package of 2,800km2 acquired in Kenya for an initial consideration of US$22 million
- Operational Review initiated to drive improved returns and free cash flow generation from the existing asset base
- Net cash position of US$401 million as at 31 December 2012
- Proposed final dividend of US12.3 cents per share; total dividend for 2012 of US16.3 cents per share
Operational Review
As announced in January 2013, we have initiated an Operational Review of our business. The core focus is to drive free cash flow generation commensurate with the quality and size of our asset base. The Review is expected to run through the coming six months and we expect to realise clear benefits in our cost structure and operating metrics throughout the year as we implement specific initiatives.
The specific initiatives which form the core of the Operational Review are:
1) Operating Cost Reductions
2) Capital Discipline
3) Organisational Structure
4) Corporate Overhead Cost Reductions
5) Mine Planning Deliverability
Each of the initiatives outlined above are focused on driving returns for the business and ultimately for shareholders. Each of the initiatives are being led by a member of the Senior Leadership Team and will include both internal and external expertise in order to analyse and implement future initiatives. Further details as to the progress on the Operational Review will be provided to the market throughout the year, as a part of our periodic results releases.
Key Statistics
| African Barrick Gold plc |
Three months ended
31 December |
|
Year ended 31 December |
| (Unaudited) |
2012 |
2011 |
|
2012 |
2011 |
| Attributable Gold Production (ounces)1 |
180,684 |
160,020 |
|
626,212 |
688,278 |
| Attributable Gold Sold (ounces)1 |
159,585 |
158,869 |
|
609,252 |
699,539 |
| Attributable Cash cost ($/ounce)2 |
958 |
779 |
|
949 |
692 |
| Average realised gold price ($/ounce)2 |
1,700 |
1,655 |
|
1,668 |
1,587 |
| (in US$'000) |
|
|
|
|
|
| Revenue |
287,944 |
285,198 |
|
1,087,339 |
1,217,915 |
| EBITDA2,3 |
75,565 |
115,225 |
|
330,869 |
545,448 |
| Cash generated from operating activities |
92,639 |
159,621 |
|
257,903 |
498,323 |
| Net earnings |
(34,694) |
52,683 |
|
59,471 |
274,895 |
| Basic earnings per share (EPS) (cents) |
(8.5) |
12.8 |
|
14.5 |
67.0 |
| Adjusted net earnings2 |
11,319 |
52,683 |
|
105,484 |
274,895 |
| Adjusted earnings per share (AEPS) (cents)2 |
2.8 |
12.8 |
|
25.7 |
67.0 |
| Dividend per share (cents) |
12.3 |
13.1 |
|
16.3 |
16.3 |
| Operational cash flow per share (cents)2 |
22.6 |
38.9 |
|
62.9 |
121.5 |
1 Group production and sold ounces consolidate 100% of Tulawaka’s production base. Attributable production and sold ounces reflect equity ounces which exclude 30% of Tulawaka’s production and sales base.
2Cash costs per ounce sold, average realised gold price, EBITDA, cash margin, adjusted net earnings, adjusted earnings per share and operational cash flow per share are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non-IFRS measures” on in the results release for the definitions of each measure.
Outlook
In 2013, we expect to produce between 540,000 - 600,000 ounces of gold, at total cash costs2, including royalties, of between US$925 and US$975 per ounce sold. This incorporates a US$120 per ounce reduction resulting from the adoption of the new accounting standard for deferred stripping (IFRIC 20).