Gold mining shares tanked in 2013 as precious metal prices tumbled. Few were hit as badly as high-cost Tanzanian miner African Barrick Gold (ABG), which saw three-quarters of its market capitalisation wiped out.
But the price of the yellow metal has recently climbed back to nearly $1,300 (£798) an ounce from just under $1,200 an ounce late last year. That, combined with a hugely effective cost-cutting programme at ABG's gold mines, has helped resurrect the company's share price - now 244p, up from a low of 94p in June. How far it can recover from here will depend mostly on the gold price, but also whether the company can continue to find cost savings.
On that front, ABG is certainly heading in the right direction. "It was the first time the company met guidance on production and costs for several years, so we're pleased about that," says Brad Gordon, ABG's new chief executive. The company reduced all-in sustaining costs (AISC) of gold production by nearly $500 an ounce year-on-year to $1,171 in the fourth quarter. The fall in the gold price, nevertheless, resulted in $823m of mine impairment charges, skewing the bottom line performance.
AFRICAN BARRICK GOLD (ABG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 244p | MARKET VALUE: | £1.0bn | |
| TOUCH: | 243-244p | 12-MONTH HIGH: | 347p | LOW: 94p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 469¢ | NET CASH: | $140m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 0.7 | 150 | 14.3 | nil |
| 2010 | 1.0 | 309 | 52.2 | 5.3 |
| 2011 | 1.2 | 403 | 67.0 | 16.3 |
| 2012 (restated) | 1.0 | 179 | 24.5 | 16.3 |
| 2013 | 0.9 | -929 | -181 | 3 |
| % change | -8 | - | - | -82 |
Ex-div: 30 Apr Payment: 23 May £1=$1.63 | ||||
