25 July 2014
Results for the 6 months ended 30 June 2014 (Unaudited)
Based on IFRS and expressed in US Dollars (US$)
African Barrick Gold plc (“ABG’’) reports half year 2014 results
“We are pleased to report strong results for H1 2014, with increased production and continued cost discipline enabling the
business to return to cash generation,” said Brad Gordon, Chief Executive Officer of African Barrick Gold. “We have now
delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational
improvements through the business. During H1 2014 we produced 346,581 ounces of gold, an improvement of 13% on the same
period in 2013, at an AISC of US$1,118 per ounce, a reduction of 25% on the previous year. During the second quarter, we
delivered the first ounces from the Bulyanhulu CIL Expansion project with development work on the Bulyanhulu Upper East zone
and the Gokona underground exploration portal progressing to plan. As a result of the strong H1 2014 performance and the
incorporation of the expected production from Bulyanhulu Upper East, we now expect full year gold production to be in excess of
700,000 ounces whilst continuing to target an AISC at the bottom of our guidance range of US$1,100-1,175 per ounce.”
Operational Highlights

Q2 gold production of 178,206 ounces, 8% higher than Q2 2013, with gold sales of 171,563 ounces
1,2
1,2

Q2 AISC of US$1,105 per ounce sold, 21% lower than Q2 2013, with cash costs of US$749 per ounce

H1 gold production of 346,581 ounces with gold sales of 330,947 ounces, 13% and 5% respectively, higher than H1 2013
1,2
1,2

H1 AISC of US$1,118 per ounce sold and cash costs of US$752, respectively down 25% and 14% on H1 2013

First ounces produced from the Bulyanhulu CIL Expansion project, with final commissioning due to complete in Q3 2014

Bulyanhulu Upper East and North Mara Underground projects progressing well and on schedule

Continued strong results from the West Kenya Exploration Project
Financial Highlights
 Cash position increased during Q2 2014 by US$16 million to stand at US$270 million as at 30 June 2014
 H1 revenue of US$446 million, 9% below H1 2013, as the impact of a lower average realised gold price more than offset
increased sales volumes
1,3
 H1 EBITDA of US$132 million, 1% higher than H1 2013, due to lower cash costs
1,3
 H1 net earnings of US$41 million (US10.0 cents per share) impacted by a higher non cash tax charge during Q2 2014
 H1 operational cash flow increased to US$127 million (28% higher than H1 2013)
 H1 capital expenditure of US$115 million, 45% lower than H1 2013 due to revised mine plans and stringent capital controls
 Interim dividend of US1.4 cents per share declared, based on a new cash flow based metric
(Unaudited)
Gold Production (ounces)
Gold Sold (ounces)
1
Cash cost (US$/ounce)
1
AISC (US$/ounce)
1
Average realised gold price (US$/ounce)
(in US$'000)
Revenue
1,3
EBITDA
3
Net earnings/(loss)
3
Basic earnings/(loss) per share (EPS) (cents)
Cash generated from operating activities
Capital expenditure
4
Three months ended 30 June
2
2014
2013
178,206
164,439
171,563
170,092
749
862
1,105
1,404
1,277
1,366
Six months ended 30 June
2
2014
2013
346,581
330,947
752
1,118
1,290
307,198
314,369
876
1,483
1,480
229,222
66,959
18,412
4.5
76,381
241,900
48,828
(721,946)
(176.0)
41,691
445,509
131,621
40,822
10.0
127,107
487,360
130,771
(701,230)
(171.0)
99,017
58,964
103,347
114,744
209,056
1
These are non-IFRS measures. Refer to page 23 for definitions
2013 comparative amounts have been restated to exclude Tulawaka
EBITDA and net earnings consist of earnings from both continuing and discontinued operations
4
Excludes non-cash reclamation asset adjustments and includes finance lease purchases
2
3
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
Operational Review
Our continued delivery on the cost saving targets set out at the start of the Operational Review is highlighted by a further
reduction in Q2 2014 AISC of 2% over Q1 2014 and an H1 2014 reduction of 25% over the previous period. Together with a
strong production profile, this enabled ABG to deliver a return to net cash flow generation during Q2 2014. We remain
committed and on track to deliver against the US$185 million cost saving target as previously set out and reflected in our AISC
guidance.
Safety
During the first half of the year, Bulyanhulu regrettably experienced one fatality. On 25 March 2014, Emmanuel Mrutu, one of
our underground employees sadly passed away as a result of injuries sustained following a fall-of-ground incident. We have
completed internal and external investigations into this tragic incident in order to mitigate any future reoccurrence. As a mark
of respect operations ceased for a 24 hour period.
During the second quarter Bulyanhulu experienced a non-operational fatality which led to two weeks of disrupted operations at
the mine. On 20 May 2014, an underground employee went missing following a night shift. All mining operations were initially
ceased and an intensive search operation was launched. On 1 June 2014, the body of the deceased was found and
investigations by the Tanzanian authorities have subsequently determined that regrettably the employee took his own life.
Ensuring the safety of all our employees is paramount, and we have continuously improved our safety performance at all of
our operations over the past few years. In this regard, we have launched a behavioural safety programme called WeCare at
each of our operations to further enhance our safety processes.
Board Changes
During the six months ended 30 June 2014, David Hodgson stepped down as Non-Executive Director of the Company. The
ABG Board now comprises eleven Directors, including seven Independent Non-Executive Directors, one Executive Director
and three nominees from Barrick Gold Corporation.
Indirect Taxes
Further progress has been made with respect to the build up of VAT, and the Company received net refunds of US$18 million
during the second quarter, bringing total net refunds for H1 2014 to approximately US$28 million. We have also continued
discussions with the Tanzanian Government on the establishment of an appropriate mechanism to safeguard the recoverability
of VAT payments over the long term. In this regard, we have submitted proposals for the establishment of an escrow account
for VAT paid on domestic goods, similar to that currently used to provide for the refunding of VAT paid on imports and are
awaiting further feedback on this proposal. As at 30 June 2014, the outstanding amount relating to the total indirect tax
receivable, not covered by the 2011 Memorandum of Settlement, stood at US$66 million, roughly US$30 million lower than 31
December 2013.
Bulyanhulu Upper East
In April 2014 the Board approved the next step in the optimisation of Bulyanhulu through the acceleration of mining from the
Upper East Zone. The Zone is expected to produce 1.7 million ounces of gold, averaging 60,000 ounces per annum over a life
in excess of 25 years at an AISC of below our target run rate for Bulyanhulu for year-end 2015 of US$900 per ounce.
Following the Board approval, the mine undertook waste development in the Zone at a capital cost of US$4.7 million in Q2
2014. As expected, the mine will commence ore development in Q3 2014 and this is expected to lead to production from the
Upper East Zone of approximately 15,000 ounces of gold in H2 2014, weighted towards the fourth quarter. ABG continues to
expect that the 2014 capital requirements for the project will be approximately US$15 million. All capital associated with the
project to date has been categorised as capitalised development and is included in the Bulyanhulu and Group AISC figures.
Bulyanhulu Deep West
We have also progressed the accelerated development of the Bulyanhulu Deep West Zone through a contractor to increase
access to higher grade ore from Q4 2014. During Q2 2014 we incurred underground development capital costs of US$4.8
million for the project and we expect to incur similar costs per quarter for the remainder of 2014. This will be categorised as
capitalised development and is included in the Bulyanhulu and Group AISC figures.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
Bulyanhulu CIL Expansion
During the second quarter, we progressed the commissioning of the new CIL circuit at Bulyanhulu, which will add over 40,000
ounces per annum once fully operational, and are nearing completion of the commissioning stage. Towards the end of June,
roughly 6,500 tonnes of rougher tailings were treated and pumped into the new CIL circuit, resulting in 273 ounces of gold
being produced in circuit. We expect commissioning to be complete in early Q3 2014 with the first gold pour in August and the
ramp up of production to continue throughout the third quarter. We continue to expect production of 20,000 ounces in 2014
from the project, and are investigating an option for accelerating the retreatment of the historic higher grade tailings in
preference to the rougher tailings.
Gokona Underground
The feasibility study into the potential to mine Gokona Cut 3 via an underground operation progressed well in the second
quarter and is on track to be presented to the Board for approval in Q4 2014. During Q2 2014, ABG made the final decision on
the location of the exploration portal which will provide the opportunity to develop a better understanding of the ore body,
provide initial access to ore and drilling access to the deeper extensions of the ore body. Early works towards the construction
of the portal are in progress with the first blast due in August. The total expansionary capital cost of the portal is expected to be
around US$10 million.
Interim dividend
To ensure that our dividend policy is more closely aligned with the cash generation of the business, the Board of Directors have
approved an amendment to the existing dividend policy such that rather than being based on net earnings it will now be based
on operational cash flow after sustaining capital and capitalised development but before expansion capital.
The Board believes this metric more appropriately reflects both ABG‟s and the wider market‟s focus on cash flow generation as
well as the commitment to ongoing capital returns to shareholders. The dividend payout ratio of 15%-30% and the timing of the
payment, being 1/3 of the dividend as an interim dividend and the balance as a final dividend, remain unchanged.
In line with the above change, the Board of Directors is pleased to announce the approval of an interim dividend for 2014 of
US1.4 cents per share, an increase of 40% when compared to H1 2013.
The interim dividend will be payable on 22 September 2014 to holders on record at 29 August 2014. The ex-dividend date will
be 27 August 2014. ABG will declare the interim dividend in US dollars. Unless a shareholder elects to receive dividends in US
dollars, they will be paid in pounds sterling with the US dollar amount being converted into pounds sterling at the exchange rate
prevailing at the time. The last date for receipt of currency elections will be 2 September 2014. The exchange rate for the
conversion of the interim dividend will be elected on or around 4 September 2014.
Outlook
Over the past six months we have continued to deliver a strong performance from our operating portfolio, with sustainable cost
containment across each of the mines and production growth led by North Mara. As we move into the second half of the year
we expect the contribution from Bulyanhulu to increase as we begin to access higher grade areas, and both the CIL Expansion
and the Upper East projects begin to contribute ounces. At North Mara, we expect the head grade to drop in the second half of
the year as the high grade ore from Gokona will be increasingly blended with lower grade material from Nyabirama. At
Buzwagi, we expect the grade to revert to between 1.5-1.6g/t in the second half, but anticipate that throughput levels will
increase.
Following the approval of the Upper East Project and the Gokona Underground portal in Q2 2014 we expect capital expenditure
for the year to be between US$255–275 million. Sustaining capital (including land purchases) is expected to be US$80-90
million, with an acceleration of spending in the second half of the year versus H1 2014. Capitalised development is expected to
total US$125-135 million as a result of the accelerated development of the Bulyanhulu Deep West Zone together with the
categorisation of the Bulyanhulu Upper East project as capitalised development. Expansionary capital is expected to amount to
US$50 million which incorporates reduced residual CIL Expansion spend and the Gokona Underground portal.
As a result of the strong performance in H1 2014 and the addition of the Upper East ounces into the 2014 plan, we are revising
production guidance upwards for the year to in excess of 700,000 ounces. We maintain our guidance for cash costs of US$740
to US$790 per ounce and all-in sustaining costs of US$1,100 to US$1,175 per ounce sold, and are targeting the bottom of both
these ranges.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
Key statistics – restated to reflect Tulawaka as a discontinued operation
(Unaudited)
Tonnes mined (thousands of tonnes)
Ore tonnes mined (thousands of tonnes)
Ore tonnes processed (thousands of tonnes)
Process recovery rate (percent)
Head grade (grams per tonne)
Gold production (ounces)
Gold sold (ounces)
Copper production (thousands of pounds)
Copper sold (thousands of pounds)
Cash cost per tonne milled (US$/t)
Per ounce data
Average spot gold price²
1
Average realised gold price
1
Total cash cost
1
All-in sustaining cost
Average realised copper price (US$/lb)
Three months ended 30 June
3
2014
2013
10,355
15,141
2,115
1,727
1,925
2,072
89.8%
88.8%
3.2
2.7
178,206
164,439
171,563
170,092
3,454
3,122
2,874
2,756
67
71
1,288
1,277
749
1,105
3.16
1,415
1,366
862
1,404
3.04
Six months ended 30 June
3
2014
2013
19,892
29,118
3,908
3,378
3,770
3,983
89.5%
88.9%
3.2
2.7
346,581
307,198
330,947
314,369
6,430
5,584
5,391
6,113
66
69
1,291
1,290
752
1,118
3.07
1,523
1,480
876
1,483
3.23
Financial results – restated to reflect Tulawaka as a discontinued operation
(Unaudited, in US$'000 unless otherwise stated)
Continuing operations:
Revenue
Cost of sales
Gross profit
Corporate administration
Share based payments
Exploration and evaluation costs
Corporate social responsibility expenses
Impairment charges
Other charges
Profit/(loss) before net finance expense and taxation
Finance income
Finance expense
Profit/(loss) before taxation
Tax (expense)/credit
Net profit/(loss) from continuing operations
Discontinued operations:
Net (loss)/profit from discontinued operations
Net profit/(loss) for the period
Three months ended 30 June
3
2014
2013
Attributed to:
Owners of the parent (net earnings)
- Continuing operations
- Discontinued operations
Non-controlling interests
- Discontinued operations
Six months ended 30 June
3
2014
2013
229,222
(173,333)
55,889
(7,618)
(1,593)
(6,025)
(1,811)
(6,159)
32,683
280
(2,102)
30,861
(12,047)
18,814
241,900
(203,348)
38,552
(9,169)
425
(4,126)
(3,077)
(910,989)
(12,659)
(901,043)
407
(2,177)
(902,813)
198,907
(703,906)
445,509
(332,474)
113,035
(13,975)
(4,917)
(10,995)
(4,307)
(12,782)
66,059
630
(4,504)
62,185
(22,716)
39,469
487,360
(386,733)
100,627
(17,583)
3,861
(7,715)
(6,228)
(910,989)
(15,597)
(853,624)
995
(4,696)
(857,325)
184,648
(672,677)
(402)
18,412
(25,722)
(729,628)
886
40,355
(40,741)
(713,418)
18,412
18,814
(402)
-
(721,946)
(703,906)
(18,040)
(7,682)
(7,682)
40,822
39,469
1,353
(467)
(467)
(701,230)
(672,677)
(28,553)
(12,188)
(12,188)
1
These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures”‟ on page 23 for definitions.
Reflect the London PM fix price.
3
Restated for the reclassification of Tulawaka as a discontinued operation.
2
African Barrick Gold Half Year Report for the six months ended 30 June 2014
4
LSE: ABG
For further information, please visit our website: www.africanbarrickgold.com or contact:
African Barrick Gold plc
+44 (0) 207 129 7150
Brad Gordon, Chief Executive Officer
Andrew Wray, Chief Financial Officer
Giles Blackham, Investor Relations Manager
Bell Pottinger
Daniel Thöle
+44 (0) 207 861 3232
About ABG
ABG is Tanzania‟s largest gold producer and one of the largest gold producers in Africa. We have three producing mines, all
located in Northwest Tanzania, and several exploration projects at various stages of development in Tanzania and Kenya. We
have a high-quality asset base, solid growth opportunities and a clear strategy of optimising, expanding and growing our
business.
Maintaining our licence to operate through acting responsibly in relation to our people, the environment and the communities in
which we operate is central to achieving our objectives.
ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange
under the symbol ABG and have a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation is our
majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise
stated in this report.
Conference call
A conference call will be held for analysts and investors on 25 July 2014 at 11:30am London time.
The access details for the conference call are as follows:
Participant dial in:
+44 (0) 203 003 2666 / +1 866 966 5335
Password:
ABG
A recording of the conference call will be made available at www.africanbarrickgold.com/investors/financial-reports/2014.aspx
after the call.
FORWARD- LOOKING STATEMENTS
This report includes “forward-looking statements” that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These
statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future
production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words “plans,” “expects,” “anticipates,”
“believes,” “intends,” “estimates” and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to
differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Factors that could cause or contribute to differences between the actual results,
performance and achievements of ABG include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in
countries in which ABG conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices
(such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), ABG’s ability to successfully integrate
acquisitions, ABG’s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to
process its mineral reserves successfully and in a timely manner, ABG’s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which
may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in ABG’s business
strategy including, the ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production
and risks and factors affecting the gold mining industry in general. Although ABG’s management believes that the expectations reflected in such forward-looking statements are reasonable,
ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this report. Any forwardlooking statements in this report only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or
applicable law, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this report, whether as a result of new information, future
events or otherwise. Nothing in this report should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that ABG’s profits or earnings per share
for any future period will necessarily match or exceed the historical published profits or earnings per share of ABG.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
TABLE OF CONTENTS
Interim Operating Review
7
Exploration Review
12
Financial Review
14
Going Concern Statement
22
Non-IFRS measures
23
Risk Review
25
Directors‟ Responsibility Statement
25
Auditor‟s Review Report
26
Condensed Interim Financial Information:
- Consolidated Income Statement and Consolidated Statement of Comprehensive Income
27/28
- Consolidated Balance Sheet
29
- Consolidated Statement of Changes in Equity
30
- Consolidated Statement of Cash Flows
31
- Notes to the Consolidated Interim Financial Information
32
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Interim Operating Review
Half Year Review
For the first half of 2014 revenue amounted to US$445.5 million, 9% lower than the same period in 2013. Production of
346,581 ounces drove a 5% increase in sales volumes (16,578 ounces) but this was more than offset by a 13% decrease in
the average realised gold price of US$1,290 per ounce, down from US$1,480 in H1 2013. EBITDA increased by 1% to
US$131.6 million in H1 2014 despite the lower revenue, mainly due to a US$30.2 million reduction in direct mining costs,
reflected in the 25% reduction of AISC to US$1,118 per ounce.
Operationally, North Mara continued to mine high grade material from the Gokona pit which drove H1 2014 production of
138,816 ounces, up 8% on the prior year period, and AISC down by 29% to US$936 per ounce sold. Bulyanhulu saw a 9%
increase in head grade and a marginal increase in throughput which drove up H1 2014 production by 13% to 105,420 ounces
and AISC down by 21% to US$1,249 per ounce sold. Buzwagi saw a 34% reduction in total tonnes mined over the first half of
the year against H1 2013 which helped to reduce AISC by 29% to US$1,169 per ounce sold. Production increased to 102,344
ounces as a result of higher grade material milled which more than offset the reduction in throughput.
As a result of operational and working capital improvements, cash generated from operating activities in H1 2014 increased by
28% over the prior year period to US$127.1 million, in spite of the reduction in the average realised sales price. Over the first six
months of the year this was US$4.5 million lower than EBITDA, but in Q2 2014 the Company generated positive net cash flows
of US$15.5 million.
Our cash balance as at 30 June 2014 amounted to US$269.6 million.
Capital expenditure for the six months ended 30 June 2014 amounted to US$114.7 million compared to US$209.1 million in H1
2013. Capital expenditure primarily comprised capitalised development expenditure (US$69.0 million), including US$4.7 million
related to waste development from the Bulyanhulu Upper East project and US$4.8 million related to the Bulyanhulu Deep West
project, investment in the Bulyanhulu CIL Expansion project (US$24.9 million), investments in tailings and infrastructure (US$9.6
million) and component and equipment costs (US$6.7 million).
Second Quarter Review
The second quarter delivered positive results, with total production of 178,206 ounces, an increase of 8% on Q2 2013. Sales
ounces amounted to 171,563, 4% lower than production due to the timing of concentrate production at the end of the quarter.
Copper production for the quarter of 3.5 million pounds was 11% higher than in Q2 2013 (3.1 million pounds), due to higher
copper grades, mainly at Buzwagi.
North Mara continued its strong performance during the quarter with a 10% year on year increase in production due to improved
throughput rates as a result of improved mill utilisation rates. The improved throughput rate was marginally offset by a 3%
decrease in head grade.
At Bulyanhulu, production of 50,241 ounces was 9% down on Q2 2013 due to lower throughput as a result of ore shortages
given the disruption of mining operations for two weeks in May 2014 following a non-operational fatality. Lower throughput was
offset by a 6% increase in head grade as a result of higher mined grade given improved availability of high grade stopes.
At Buzwagi, gold production for the quarter of 57,787 ounces was 26% higher than in Q2 2013 driven by a 36% increase in
head grade. Throughput rates were negatively impacted by lower mill availability primarily as a result of the re-lining of both the
SAG and Ball mills during the quarter, while ore mined was 67% higher in Q2 2013 year due to previously communicated
changes in the mine plan which reduced the amount of waste material removed when compared to Q2 2013.
Total tonnes mined during the quarter amounted to 10.4 million tonnes, a decrease of 32% on Q2 2013. Ore tonnes mined from
open pits amounted to 1.9 million tonnes compared to 1.5 million in Q2 2013, driven by the increased focus on mining ore at
Buzwagi due to the change in the mine plan, partially offset by a reduction of tonnes mined at North Mara due to mine
sequencing.
Ore tonnes processed amounted to 1.9 million tonnes, a decrease of 7% on Q2 2013 primarily driven by reduced throughput at
Buzwagi and at Bulyanhulu as discussed above.
Head grade for the quarter of 3.2 grams per tonne (g/t) was 19% higher than in Q2 2013 (2.7 g/t). This was due to a higher
mined grade at Buzwagi as mining focused on the main ore zone as per the revised mine plan, and an improvement in grade at
Bulyanhulu due to improved access to higher grade stopes.
Our cash costs for the quarter were 13% lower than in Q2 2013, and amounted to US$749 per ounce sold. The decrease was
primarily due to:
‒ the impact of the increased production base (US$160/oz);
‒ the impact of the Operational Review (US$77/oz) on direct mining costs through:
o a reduction in the international workforce (29% down compared to the same period in 2013);
o lower G&A costs driven by lower freight costs and aviation charges at Bulyanhulu and North Mara;
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
o
o
increased supplier discounts; and
lower consumables costs driven by lower reagents and grinding media costs at North Mara and lower tyres
and grinding media costs at Buzwagi.
This was partially offset by lower capitalised development costs at Buzwagi and North Mara as a result of the revised mine plan
driving a lower strip ratio (US$122/oz).
All-in sustaining cost of US$1,105 per ounce sold for the quarter was 21% lower than Q2 2013, predominantly due to lower cash
costs as explained above, combined with lower sustaining capital expenditure and capitalised development.
Capital expenditure for the quarter amounted to US$59.0 million compared to US$103.3 million in Q2 2013. Capital expenditure
mainly consisted of capitalised development expenditure (US$35.8 million), including US$4.7 million related to waste
development from the Bulyanhulu Upper East project and US$4.8 million relating to the Bulyanhulu Deep West project,
investment in the Bulyanhulu CIL Expansion project (US$10.1 million), investments in tailings and infrastructure (US$7.2 million)
and component costs (US$3.8 million).
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Mine Site Review
Bulyanhulu
Key statistics
(Unaudited)
Underground ore tonnes hoisted
Ore milled
Head grade
Mill recovery
Ounces produced
Ounces sold
Cash cost per tonne milled
Cash cost per ounce sold
AISC per ounce sold
Copper production
Copper sold
Breakdown of Capital Expenditure
- Sustaining capital
- Capitalised development
- Expansionary capital
Capital expenditure
- Non-cash reclamation asset adjustments
Total capital expenditure
Three months ended 30 June
2014
2013
217
246
205
243
8.3
7.8
91.5%
90.7%
50,241*
54,938
52,044
54,386
233
210
919
936
1,348
1,375
1,135
1,382
1,153
1,167
Kt
Kt
g/t
%
oz
oz
US$/t
US$/oz
US$/oz
Klbs
Klbs
US$('000)
US$('000)
US$('000)
2,334
17,158
10,972
30,464
3,056
33,520
US$('000)
US$('000)
Six months ended 30 June
2014
2013
428
418
425
414
8.4
7.7
91.6%
91.0%
105,420*
92,974
101,165
87,802
206
219
867
1,033
1,249
1,581
2,431
2,238
2,347
2,035
7,953
11,822
29,678
49,453
(6,843)
42,610
4,482
28,414
25,831
58,727
8,721
67,448
15,546
24,102
52,421
92,069
(9,208)
82,861
* Includes 273 ounces of gold in circuit at the CIL Expansion Plant
Operating performance
Gold production of 50,241 ounces for the quarter was 9% lower than in Q2 2013, in spite of the 6% increase in grade driven by
an increase in the availability of high grade stopes. Tonnes hoisted and throughput were both impacted by the disruption of
mining operations for approximately two weeks in May as a result of the search for a missing underground employee who was
subsequently found deceased as a result of a non-operational incident. Gold ounces sold of 52,044 ounces were 4% below that
in Q2 2013 primarily due to the lower production base, but exceeded production for the quarter due to the sale of concentrate
ounces on hand at the end of Q1 2014.
Copper production of 1.1 million pounds for the quarter was 18% lower than in Q2 2013 due to lower throughput.
Cash costs for the quarter of US$919 per ounce sold were 2% lower than the prior year of US$936, although they increased
over Q1 2014 as a result of the lower production base and an increase in operating expenses to support the ramp up of
production in the second half of the year. Against the prior year period, cash costs were positively impacted by lower general
and administration costs primarily driven by lower freight costs, aviation charges, corporate charges and consumable costs.
AISC per ounce sold for the quarter of US$1,348 was 2% lower than in Q2 2013 (US$1,375), but higher than Q1 2014 as a
result of lower production, higher cash costs and higher capitalised development costs as explained below.
During the quarter, we progressed the commissioning of the new CIL circuit at Bulyanhulu and are nearing the completion of the
commissioning stage. In late June, roughly 6,500 tonnes of rougher tails were treated and pumped into the new CIL circuit,
resulting in 273 ounces of gold being produced in circuit. We expect commissioning of this project to be complete early in Q3
with the first gold pour in August. The ramp up of production will continue throughout the third quarter. We continue to expect
production of 20,000 ounces in 2014 from the project, and are investigating an option for accelerating the retreatment of the
historic higher grade tailings in preference to the rougher tailings.
We undertook waste development in the Upper East Zone for a capital cost of US$4.7 million in Q2 2014 and will commence
ore development as expected in Q3 2014. As a result, we expect production from the Upper East Zone of approximately 15,000
ounces of gold in H2 2014, weighted towards the fourth quarter. In addition, we have progressed the development of the Deep
West Zone through a contractor to accelerate access to higher grade ore from Q4 2014, and have incurred underground
development capital costs of US$4.8 million during the quarter. ABG expects that the combined capital requirements the Upper
East Zone and Deep West Zone for 2014 will be approximately US$30 million. This is categorised as capitalised development
and is included in the Bulyanhulu and Group AISC figures.
Capital expenditure for the quarter of US$30.5 million was 38% lower than in Q2 2013 of US$49.5 million. Capital expenditure
consisted mainly of capitalised underground development costs (US$17.2 million, inclusive of US$4.7 million of Upper East and
US$4.8 million of Deep West spend) and expansionary capital investment relating to the CIL circuit (US$10.1 million).
African Barrick Gold Half Year Report for the six months ended 30 June 2014
9
LSE: ABG
Buzwagi
Key statistics
(Unaudited)
Tonnes mined
Ore tonnes mined
Ore milled
Head grade
Mill recovery
Ounces produced
Ounces sold
Cash cost per tonne milled
Cash cost per ounce sold
AISC per ounce sold
Copper production
Copper sold
Breakdown of Capital Expenditure
- Sustaining capital
- Capitalised development
Capital expenditure
- Non-cash reclamation asset adjustments
Total capital expenditure
Kt
Kt
Kt
g/t
%
oz
oz
US$/t
US$/oz
US$/oz
Klbs
Klbs
Three months ended 30 June
2014
2013
5,803
8,475
1,333
800
1,010
1,197
1.9
1.4
91.9%
87.3%
57,787
45,726
49,479
44,556
41
39
837
1,054
1,078
1,632
2,318
1,740
1,721
1,589
US$('000)
US$('000)
3,915
5,525
9,440
174
9,614
US$('000)
US$('000)
Six months ended 30 June
2014
2013
11,346
17,305
2,354
1,501
1,980
2,290
1.8
1.3
90.3%
88.2%
102,344
85,746
92,442
96,367
41
39
879
918
1,169
1,643
3,999
3,346
3,044
4,078
4,512
17,426
21,938
(5,770)
16,168
5,776
15,157
20,933
839
21,772
20,657
41,338
61,995
(6,809)
55,186
Operating performance
Gold production for the quarter of 57,787 ounces was 26% higher than in Q2 2013, driven by increased head grade as a result of
the re-engineered mine plan as communicated in 2013. Gold sold for the quarter amounted to 49,479 ounces, 11% above that of
Q2 2013 due to the increased production base, but lagging production as a result of the availability and timing of copper
concentrate shipments. We anticipate that the majority of the unsold ounces at the end of June will be shipped during Q3 2014
with the remainder sold in Q4 2014.
Tonnes milled during the quarter were 16% lower than in Q2 2013 due to lower mill availability as a result of the re-lining of both
the SAG and Ball mills in May, coupled with the limiting of daily throughput to manage a defective SAG mill gearbox ahead of a
change out in early Q3. The management of the SAG mill gearbox meant that the process plant ran on 100% diesel power to
ensure consistent power supply from May, although this has now reverted back to the normal power mix.
Total tonnes mined for the quarter of 5.8 million tonnes were 32% lower than in Q2 2013 due to changes in the mine plan
compared to 2013 due to the focus on the removal of less waste and mining of higher grade areas.
Copper production of 2.3 million pounds for the quarter was 33% higher than in Q2 2013 driven by the increased copper grades
and concentrate production.
Cash costs for the quarter of US$837 per ounce sold were 21% lower than in Q2 2013 (US$1,054). Cash costs were positively
impacted by increased production levels and resultant co-product revenue, together with savings driven by the Operational
Review in contracted services (lower rates) and labour costs (58% reduction in the international workforce). This was partially
offset by lower capitalised development costs, increased power costs to run the process plant on self generated power, and
increased maintenance costs due to increased maintenance activity.
AISC per ounce sold for the quarter of US$1,078 was 34% lower than in Q2 2013 (US$1,632). This was driven by the lower cash
cost base and lower sustaining capital and capitalised development expenditure.
Capital expenditure for the quarter of US$9.4 million was 57% lower than in Q2 2013 (US$21.9 million). The significant change to
the mine plan reduced the levels of waste movement thereby reducing capitalised stripping costs. Key capital expenditure for the
quarter included capitalised stripping costs (US$5.5 million), investments in tailings and infrastructure (US$2.1 million) and
component change out costs (US$1.2 million).
African Barrick Gold Half Year Report for the six months ended 30 June 2014
10
LSE: ABG
North Mara
Key statistics
(Unaudited)
Tonnes mined
Ore tonnes mined
Ore milled
Head grade
Mill recovery
Ounces produced
Ounces sold
Cash cost per tonne milled
Cash cost per ounce sold
AISC per ounce sold
Breakdown of Capital Expenditure
- Sustaining capital
- Capitalised development
- Expansionary capital
Capital expenditure
- Non-cash reclamation asset adjustments
Total capital expenditure
Kt
Kt
Kt
g/t
%
oz
oz
US$/t
US$/oz
US$/oz
Three months ended 30 June
2014
2013
4,335
6,420
566
681
710
634
3.5
3.6
86.9%
87.0%
70,177
63,774
70,040
71,150
55
77
561
684
893
1,266
US$('000)
US$('000)
US$('000)
4,557
13,125
978
18,660
1,382
20,042
US$('000)
US$('000)
Six months ended 30 June
2014
2013
8,118
11,395
1,126
1,458
1,365
1,280
3.6
3.6
87.3%
87.1%
138,816
128,478
137,340
130,200
59
75
584
739
936
1,313
9,183
22,271
376
31,830
(4,442)
27,388
8,088
25,392
978
34,458
5,358
39,816
23,962
28,917
504
53,383
(5,950)
47,433
Operating performance
Production for the quarter of 70,177 ounces was 10% higher than in Q2 2013 despite the marginally lower head grade as
throughput rates exceeded the prior year period by 12%. The higher milled tonnes were due to improved mill efficiency. Gold
ounces sold for the quarter of 70,040 ounces were in line with production.
Cash costs for the quarter of US$561 per ounce sold were 18% lower than in Q2 2013 (US$684). Cash costs were positively
impacted by increased production levels, together with a 36% reduction in the international workforce and lower maintenance
costs, both a result of initiatives driven by the Operational Review. This was partially offset by lower capitalised mining costs and
higher contracted services costs given increased drilling rates and activity.
AISC per ounce sold for the quarter of US$893 was 29% lower than in Q2 2013 (US$1,266) due to the reasons outlined above,
combined with lower sustaining capital and capitalised development expenditure in combination with the increased production
base.
During the second half of the year, North Mara is expected to mill an increased number of ore tonnes sourced from the lower
grade Nyabirama pit rather than from the Gokona pit. As a result head grades for the full year are expected to revert towards the
reserve grade of the mine.
The feasibility study into the potential to mine Gokona Cut 3 via an underground operation continued to progress well during the
quarter and is on track to be presented to the Board for approval in Q4 2014. During Q2, ABG made the final decision on the
location of the exploration portal which will provide the opportunity to develop a better understanding of the ore body, initial
access to ore and drilling access to the deeper extensions of the ore body. Early works towards the construction of the portal are
in progress with the first blast due in August. The total expansionary capital cost of the portal is expected to be around US$10
million.
Capital expenditure for the quarter of US$18.7 million was 41% lower than in Q2 2013 (US$31.8 million), due to lower capitalised
development and lower sustaining capital expenditure, slightly offset by increased expansionary expenditure. Key capital
expenditure included capitalised stripping costs (US$13.1 million), investments in tailings and infrastructure (US$1.8 million) and
component costs (US$2.1 million). Expansion capital of US$1.0 million relates to exploration drilling costs relating to the Gokona
Underground feasibility study.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
11
LSE: ABG
Exploration Review
Exploration during H1 2014 continued to focus on the Tanzanian near-mine and in-mine brownfield programmes and the West
Kenya Joint Venture Greenfield programmes. Exploration expenditure for the first half of the year was approximately US$10.6
million and the full year forecast budget remains US$16.0 million. The 2014 exploration programmes have been weighted
toward H1 2014, with large diamond core programmes from surface and underground platforms at Bulyanhulu, and extensive
soil sampling, ground geophysics and Aircore drilling programmes across the West Kenya Joint Venture.
In H2 2014, we expect to complete surface drilling on Bulyanhulu Deep West and Aircore drilling in Kenya. We will assess the
results of H1 2014 programmes and design follow-up programmes to test positive results. The next phase of underground
drilling at Bulyanhulu, which is targeting the deep western extension of Reef 2, commenced in early July.
Bulyanhulu Deep West Surface Drilling
Throughout H1 2014, we have continued a programme of deep diamond drilling West of the Bulyanhulu mine, targeting
extensions of the Reef 1 and Reef 2 vein series. The holes are designed to test the extensions of the Reef 1 structure from 400
metres to 1,200 metres west of the current Bulyanhulu resource where historic drilling had shown indications of further gold
mineralisation. Additionally, holes will also intersect the Reef 2 vein series, and provide an indication of whether the Reef 2
system is mineralised up to 2 kilometres west of currently delineated underground resources.
During H1 2014, a total of 7,503 metres of diamond core has been drilled from the surface holes. The Reef 1 and Reef 2
system has been intersected in several holes during H1 2014, with better results being returned from Reef 2 in this part of the
Bulyanhulu mineralised system. Encouraging results from the programme to date include the following significant intersections:



BGMDD0054: 2.0m @10.7g/t Au from 1,174m - Reef 2 series
BGMDD0054: 0.5m @ 37.9g/t Au from 1,335m - Reef 2 series
BGMDD0054: 0.5m @ 29.6g/t Au from 1,390m - Reef 2 series





BGMDD0054W1: 1.29m @ 11.7g/t Au from 1,435m - Reef 1
BGMDD0054W2: 1.02m @ 24.2g/t Au from 1,034m – Reef 2 series
BGMDD0054W2: 4.50m @ 8.05g/t Au from 1,640m, includes 1.0m @ 23.8g/t Au - Reef 1
BGMDD0054W3: 1.1m @ 5.35g/t Au from 1,363m – Reef 2 series
BGMDD0054W3: 1.20m @ 11.5g/t Au from 1,367m - Reef 2 series



BGMDD0055W1: 0.6m @ 18.8g/t Au from 613m - Reef 2 series
BGMDD0055W2: 0.80m @ 16.2g/t Au from 944m – Reef 2 series
BGMDD0055W3: 0.79m @ 7.00g/t Au from 1,059m – Reef 1

BGMDD0056W1: 0.50m @ 94.6g/t Au from 805m - Reef 2 series
The results from these holes are potentially significant in demonstrating that gold mineralisation, particularly on the Reef 2 vein
system continues West of the mine, which would open the potential for an expansion of the footprint of Bulyanhulu on Reef 2.
The drilling programme is expected to be completed during H2 2014 with a single rig drilling a further 2,500 metres of diamond
core drilling. This programme will form an important part of our assessment of how to most effectively develop the Bulyanhulu
mine over the long term.
Bulyanhulu East Deeps Underground Drilling - Reef 2
The East Deeps drilling programme targeted down dip mineralisation of the Bulyanhulu Reef 2 system which is outside the
current resource model. The programme was drilled from several underground drill platforms and was aimed at adding high
grade gold resources on the East Zone. Drilling was completed during H1 2014 with a total of 3,058 metres of diamond core
completed from three holes, bringing the total for the programme to five holes at 5,598 metres. The results received were all
from the Reef 2 series and included the following encouraging intersections:




UX4700-405: 1.0m @ 19.0g/t Au
UX4700-407: 1.3m @ 76.7g/t Au
UX4700-408: 1.75m @ 13.6g/t Au
UX4700-410: 0.5m @ 18.4g/t Au
These intersections continue to prove continuity at depth of the mineralisation with high grade. This has the potential to add to
the mine resource in this area, with the high grade shoot remaining open at depth. This stage of the programme has been
completed and the results will be incorporated into the end of year resource calculations. Further drilling programmes are
planned in this area and will be completed as part of a larger Reef 2 underground resource expansion programme being
undertaken by the mine over the next few years.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
12
LSE: ABG
West Kenya Joint Venture Projects
Aircore drilling testing existing gold-in-soil anomalies along the Liranda Corridor on the south side of the Kakamega Dome
continued throughout H1 2014, with a total of 830 holes completed for 32,215 metres. The Aircore programme has been very
successful, with 247 holes of the 992 holes completed since the programme commenced in 2013 returning anomalous results
(>0.1g/t Au), of which 87 holes intersecting zones of >0.50g/t Au including better results during H1 2014 of:









KDAC0312: 3m @ 15.2 g/t Au from 41m and 9m @ 1.71 g/t Au from 62m
KDAC0361: 39.5m @ 0.81 g/t Au from 9m, including 6m @ 2.26 g/t Au
KDAC0376: 9m @ 2.57 g/t Au from 57m
KDAC0617: 6m @ 7.7 g/t Au incl. 3m @ 13.7 g/t Au
KDAC0832: 12m @ 2.77 g/t Au incl. 3m @ 9.11 g/t Au
KDAC0841: 15m @ 1.94 g/t Au and 6m @ 4.35 g/t Au
KDAC0858: 6m @ 22.3 g/t Au incl. 3m @ 44 g/t Au
KDAC0860: 27m @ 1.31 g/t Au incl. 15m @ 2.16g/t Au
KDAC0877: 12m @ 12.6g/t Au incl. 3m @ 46.3 g/t Au
The gold mineralisation has been intersected in a variety of rock types along the Liranda Corridor, which indicates opportunities
to test for different types and styles of gold deposits in this area. The majority of gold mineralisation intersected to date has
been within weathered (oxidised) bedrock, often associated with quartz veining, but not always the case.
The Aircore results to date are very encouraging given the current line spacing of the Aircore traverses varies between 200
metres and 800 metres and the average depth of drilling to date is relatively shallow at approximately 50 metres. Step-out and
infill traverses are being undertaken as part of the current phase of the programme before targets will be ranked for testing by
more advanced reverse circulation and diamond drilling.
In tandem with the Aircore drilling we are undertaking gradient and pole-dipole IP and Resistivity across selected gold-in-soil
anomalies throughout the Lake Zone Camp in the central and western areas of the project. A total of 147 line kilometres of
surveys have now been completed. Ten targets showing distinct resistivity and/or chargeability zones coincident with the goldin-soil anomalies have been delineated and will be considered as priority targets for future drilling programmes.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
13
LSE: ABG
Financial Review
The positive impact of the Operational Review and the challenging gold price environment in 2014 is reflected in the ABG
Group‟s financial results for the six months ended 30 June 2014 which also present Tulawaka as a discontinued operation:





Revenue of US$445.5 million was US$41.9 million lower than H1 2013 driven by a 13% decrease in the average
realised gold price to US$1,290 per ounce sold (US$1,480 per ounce sold in the prior year period), which more
than offset an increase of 16,578 ounces (5%) in sales volumes.
Cash costs decreased to US$752 per ounce sold from US$876 in H1 2013, driven by higher production, lower
labour costs and contracted services.
All-in sustaining costs decreased to US$1,118 per ounce sold from US$1,483 in H1 2013 due to lower cash
costs, sustaining capital expenditures and capitalised development costs.
EBITDA increased by 1% to US$131.6 million, mainly driven by lower direct mining costs achieved from the
implementation of the Operational Review initiatives.
Operational cash flow of US$127.1 million was 28% higher than H1 2013, mainly due to reduced operating costs
and decreased working capital investment.
The following review provides a detailed analysis of our consolidated results for the six months ended 30 June 2014 and the
main factors affecting financial performance. It should be read in conjunction with the consolidated interim financial information
and accompanying notes on pages 27 to 44, which have been prepared in accordance with International Financial Reporting
Standards as adopted for use in the European Union (IFRS).
Discontinued operation – Tulawaka
On 15 November 2013, ABG announced that an agreement was reached with STAMICO, the Tanzanian State Mining
Corporation, whereby STAMICO acquired the Tulawaka Gold Mine (“Tulawaka”) and certain exploration licenses surrounding
Tulawaka for a consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of
500,000 ounces, capped at US$0.5 million. As part of the agreement, STAMICO took ownership and management of the
rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and
future closure and rehabilitation liabilities for Tulawaka, and indemnified the other parties to the agreement in relation to these
liabilities. This resulted in a cash payment by ABG to STAMICO of the balance of the rehabilitation fund, less the transaction
consideration on completion. Tulawaka was 100% owned by the Tulawaka Joint Venture, in which ABG held a 70% economic
interest through a wholly owned subsidiary, and MDN Inc held the remaining 30% of the Joint Venture. Production at Tulawaka
ceased in Q2 2013. The transaction completed on 4 February 2014, resulting in a cash payment of US$11.6 million to
STAMICO.
The financial results of Tulawaka have been presented as discontinued operations in the consolidated interim financial
information. The comparative results in the consolidated interim income statement have been presented as if Tulawaka had
been discontinued from the start of the comparative period, effectively excluding the net result relating to Tulawaka from
individual income statement lines and aggregating it in one line called “Net profit/(loss) from discontinued operations”. Below is a
reconciliation showing Group financial performance on a line by line basis.
Six months ended 30 June 2014
Six months ended 30 June 2013
(US$‟000)
(Unaudited)
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Revenue
Cost of sales
445,509
(332,474)
-
445,509
(332,474)
487,360
(386,733)
12,392
(28,151)
499,752
(414,884)
Gross profit
Corporate administration
Share based payments
Exploration and evaluation costs
Corporate social responsibility expenses
Impairment charges
Other charges
113,035
(13,975)
(4,917)
(10,995)
(4,307)
(12,782)
(92)
958
113,035
(13,975)
(4,917)
(10,995)
(4,399)
(11,824)
100,627
(17,583)
3,861
(7,715)
(6,228)
(910,989)
(15,597)
(15,759)
(1,301)
114
161
(690)
(16,701)
(6,496)
84,868
(18,884)
3,975
(7,554)
(6,918)
(927,690)
(22,093)
Profit/(loss) before net finance expense
and taxation
Finance income
Finance expense
66,059
630
(4,504)
866
36
(16)
66,925
666
(4,520)
(853,624)
995
(4,696)
(40,672)
10
(79)
(894,296)
1,005
(4,775)
62,185
(22,716)
886
-
63,071
(22,716)
(857,325)
184,648
(40,741)
-
(898,066)
184,648
39,469
886
40,355
(672,677)
(40,741)
(713,418)
Profit/(loss) before taxation
Tax (expense)/credit
Net profit/(loss) for the period
African Barrick Gold Half Year Report for the six months ended 30 June 2014
14
LSE: ABG
The financial performance below is stated for continuing operations.
Revenue
Revenue for H1 2014 of US$445.5 million was 9% lower than in H1 2013 (US$487.4 million). Year-on-year realised gold prices
decreased by 13% to US$1,290 per ounce sold from US$1,480 in H1 2013, which more than offset the increase in sales
volumes of 16,578 ounces. The increase in sales ounces was primarily due to the higher production base.
Included in total revenue was co-product revenue of US$18.7 million for H1 2014, which decreased by 17% from the prior year
period (US$22.7 million) due to the lower copper sales volumes and a lower realised copper price. The H1 2014 average
realised copper price of US$3.07 per pound compared unfavourably to that of H1 2013 (US$3.23 per pound), and was driven by
global market factors regarding supply and demand.
Cost of sales
Cost of sales was US$332.5 million for H1 2014, representing a decrease of 14% on the prior year period (US$386.7 million).
The key aspects impacting the cost of sales for the reporting period were lower direct mining costs as a result of Operational
Review savings across labour, consumables and freight, a change in inventory credit driven by the investment in ore inventory
and build up of ounces on hand and lower depreciation and amortisation charges driven by the lower capital base employed.
The table below provides a breakdown of cost of sales:
(US$'000)
(Unaudited)
Cost of Sales
Direct mining costs
Third party smelting and refining fees
Royalty expense
Depreciation and amortisation
Total
Three months ended 30 June
2014
2013
122,841
5,783
10,011
34,698
173,333
141,623
3,611
10,845
47,269
203,348
Six months ended 30 June
2014
2013
238,087
9,916
19,775
64,696
332,474
268,238
7,997
21,831
88,667
386,733
A detailed breakdown of direct mining expenses is shown in the table below:
(US$'000)
(Unaudited)
Direct mining costs
Labour
Energy and fuel
Consumables
Maintenance
Contracted services
General administration costs
Capitalised mining costs
Total direct mining costs
Three months ended 30 June
2014
2013
32,976
33,926
24,850
24,907
23,549
19,522
(36,889)
122,841
39,040
35,932
28,148
23,142
23,583
24,103
(32,325)
141,623
Six months ended 30 June
2014
2013
67,973
66,345
48,723
47,923
42,300
39,591
(74,768)
238,087
80,440
70,228
54,796
47,741
50,030
45,808
(80,805)
268,238
Direct mining costs of US$238.1 million for H1 2014 were 11% lower than H1 2013 (US$268.2 million). Individual cost
components comprised:

A 15% reduction in labour costs, mainly as a result of the lower headcount at all operating sites, specifically a 29%
reduction in group international employees, driven by localisation efforts and the impact of the Operational Review.

A 6% reduction in energy and fuel expenses, driven primarily by lower diesel usage at North Mara as a result of
reduced mining activity, and at Buzwagi as a result of reduced mining and processing activity.

An 11% decrease in consumable costs, primarily due to supplier price negotiations, increased mine site efficiencies and
lower mining activity.

Maintenance costs of US$47.9 million were in line with prior year costs of US$47.7 million.

A 15% decrease in contracted services, mainly driven by lower mining activity at Buzwagi, and the renegotiated
maintenance rates associated with maintenance and repair contracts (“MARC”) contracts at Buzwagi and North Mara.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
15
LSE: ABG

A 14% decrease in general administration costs, mainly at Bulyanhulu and North Mara driven by lower freight costs
associated with inventory consumed, a decrease in the stock obsolescence provision and lower aviation charter costs
driven by the Operational Review.

Capitalised direct mining costs, consisting of capitalised development costs and the change in inventory charge, is
comprised as follows:
(US$'000)
(Unaudited)
Capitalised direct mining costs
Capitalised development costs
(Investment in)/ drawdown of inventory
Total capitalised direct mining costs
Three months ended 30 June
2014
2013
(30,649)
(6,240)
(36,889)
(52,298)
19,973
(32,325)
Six months ended 30 June
2014
2013
(64,095)
(10,673)
(74,768)
(95,775)
14,970
(80,805)
Capitalised development costs were 33% lower than H1 2013, driven by increased focus on mining ore at Buzwagi due to the
revised mine plan. The investment in inventory was US$25.6 million higher than in H1 2013 due to a build up of ore inventory
at Buzwagi due to lower throughput rates combined with increased gold inventory on hand driven by the timing of production
compared to sales. This was slightly offset by a drawdown of ore stockpiles at North Mara as a result of the improved
throughput rate and plant performance.
Corporate administration costs
Corporate administration expenses totalled US$18.9 million for H1 2014. A US$3.6 million decrease in general corporate
administration costs due to the impact of the Operational Review was more than offset by an increase of US$8.8 million in share
based payment expenses given the stronger share price performance. This resulted in a 38% increase on H1 2013 (US$13.7
million) as shown in the table below.
(US$'000)
(Unaudited)
Corporate administration
Share based payments
Total corporate administration
Three months ended 30 June
2014
2013
7,618
1,593
9,211
9,169
(425)
8,744
Six months ended 30 June
2014
2013
13,975
4,917
18,892
17,583
(3,861)
13,722
Exploration and evaluation costs
Exploration and evaluation costs of US$11.0 million were incurred in H1 2014, 43% higher than the US$7.7 million spent in H1
2013. The key focus areas for H1 2014 were drilling at Bulyanhulu deep central reefs 1 and 2 (US$5.5 million), and exploration
programmes at the West Kenya Joint Venture project amounting to US$3.3 million. The Bulyanhulu underground programme
has been completed in H1 2014 and the second half of the year should see decreased field activity across all projects.
Corporate social responsibility expenses
Corporate social responsibility costs incurred amounted to US$4.3 million for the six months compared to the prior year of
US$6.2 million. The main projects for H1 2014 related to Village Benefit Implementation Agreements (“VBIAs”) at North Mara
and contributions to general community projects funded from the ABG Maendeleo Fund.
Other charges
Other charges amounted to US$12.8 million, 18% lower than H1 2013 (US$15.6 million). The main contributors were: (i) noncash foreign exchange losses mainly related to the indirect tax receivables due to the weakening of the Tanzanian shilling
(US$7.8 million), (ii) Operational Review costs, including external services and retrenchment costs of US$5.3 million, (iii) legal
costs of US$1.9 million, and (iv) ABG‟s entry into zero cost collar contracts as part of a programme to protect it against copper,
silver, rand and fuel cost market volatility. The entry into these arrangements resulted in a combined mark-to-market
revaluation gain of US$2.7 million, due to the fact that these arrangements do not qualify for hedge accounting. Refer to note 7
of the consolidated interim financial information for further details.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Finance expense and income
Finance expense of US$4.5 million for H1 2014 was 4% lower than H1 2013 (US$4.7 million). The key drivers were US$1.2
million (US$1.5 million in 2013) relating to the servicing of the US$150 million undrawn revolving credit facility, and accretion
expenses relating to the discounting of the environmental reclamation liability (US$2.5 million). Other costs include bank charges
and interest on finance leases. Interest costs relating to the project financing on the CIL Bulyanhulu Expansion project are
capitalised to the cost of the asset due to the facility being directly attributable to the asset. For the six months ended 30 June
2014 US$2.0 million of borrowing costs have been capitalised to the project.
Finance income relates predominantly to interest charged on non-current receivables and interest received on money market
funds. Refer to note 8 of the consolidated interim financial information for details.
Taxation matters
The taxation charge was US$22.7 million for H1 2014, compared to a credit of US$184.6 million in H1 2013. The tax charge was
made up solely of deferred tax charges and reflects the impact of the profitability on a year-to-date basis. The effective tax rate in
H1 2014 amounted to 36.5% compared to 21.5% in H1 2013. The increase is mainly driven by the increase in taxable income,
and temporary higher tax losses for corporate and exploration entities in Q2 2014 for which deferred tax assets are not
recognised. This is expected to normalise in H2 2014.
Net earnings from continuing operations
As a result of the factors discussed above, net profit from continuing operations for H1 2014 was US$39.5 million, against the
prior year period loss of US$672.7 million. Lower impairment charges, costs of sales, and other charges contributed to the
variance. This was offset by the higher tax charge and lower revenue.
Earnings per share
The earnings per share for H1 2014 amounted to US10.0 cents, an increase of US181.0 cents from the prior year period loss
of US171.0 cents. The increase was driven by an increased net profit with no change in the underlying issued shares. Earnings
per share from continuing operations amounted to US9.6 cents.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Key financial performance indicators and reconciliations
Cash costs
Cash cost per ounce sold in H1 2014 (US$752 per ounce sold) decreased by 14% when compared to H1 2013 (US$876 per
ounce). Refer to the operating overview on page 7 and cost of sales explanations as part of the financial review for the details on
the year on year change.
The table below provides a reconciliation between cost of sales and total cash cost to calculate the cash cost per ounce sold.
(US$'000)
(Unaudited)
Total cost of sales
Three months ended 30 June
2014
2013
173,333
203,348
Six months ended 30 June
2014
2013
332,474
386,733
Deduct: depreciation and amortisation
Deduct: Co-product revenue
Total cash cost
(34,698)
(10,098)
128,537
(47,269)
(9,544)
146,535
(64,696)
(18,744)
249,034
(88,667)
(22,670)
275,396
Total ounces sold
171,563
170,092
330,947
314,369
749
749
862
17
879
752
752
876
27
903
Cash cost per ounce
Discontinued operations
Attributable cash cost per ounce
Refer to note 6 to the consolidated interim financial information for a reconciliation to all-in sustaining cost per ounce sold.
EBITDA
EBITDA for H1 2014 increased by 1% to US$131.6 million when compared to H1 2013 (US$130.8 million) as a result of the
lower cost of sales and other charges, partly offset by lower revenue and higher corporate administration costs. A reconciliation
between net profit for the period and EBITDA is presented below:
(US$‟000)
(Unaudited)
Net profit/ (loss) for the period
Plus income tax expense
Plus depreciation and amortisation
Plus impairment charges/write-offs
Plus finance expense
Less finance income
EBITDA
Three months ended 30 June
2014
2013
18,412
(729,628)
12,047
(198,907)
34,698
47,865
927,690
2,106
2,218
(304)
(410)
66,959
48,828
Six months ended 30 June
2014
2013
40,355
(713,418)
22,716
(184,648)
64,696
97,377
927,690
4,520
4,775
(666)
(1,005)
131,621
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
130,771
Financial position
ABG had cash and cash equivalents on hand of US$269.6 million as at 30 June 2014 (US$320.9 million as at 30 June 2013).
The Group‟s cash and cash equivalents are with counterparties whom the Group considers to have an appropriate credit rating.
Location of credit risk is determined by physical location of the bank branch or counterparty. Investments are held mainly in
United States dollars and cash and cash equivalents in other foreign currencies are maintained for operational requirements.
During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of our key growth
projects, the Bulyanhulu CIL Expansion project (“Project”). The Facility is collateralised by the Project, and has a term of seven
years with a spread over Libor of 250 basis points. The seven year Facility is repayable in equal instalments over the term o f the
Facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate
swap. The full facility of US$142 million was drawn in 2013.
The above compliments the existing undrawn revolving credit facility of US$150 million which runs until November 2016.
The net book value of property, plant and equipment increased from US$1.28 billion in December 2013 to US$1.35 billion in
June 2014. The main capital expenditure drivers have been explained in the cash flow used in the investing activities section
below, and have been offset by depreciation charges of US$64.7 million. Refer to notes 6 and 12 to the consolidated interim
financial information for further details.
Total indirect tax receivables, net of a discount provision applied to the non-current portion, decreased from US$159.8 million as
at 31 December 2013 to US$126.6 million as at 30 June 2014. The decrease was mainly due to refunds of US$65.8 million
received during H1 2014, which was offset by a net increase in current VAT receivables of approximately US$37 million. The net
deferred tax position decreased from an asset of US$14.9 million as at 31 December 2013 to a liability of US$7.8 million. This
was mainly driven by the reduction in deferred tax assets as a result of the company making taxable income.
Net assets attributable to owners of the parent increased from US$1.93 billion in December 2013 to US$1.96 billion in June
2014. The increase reflects the current year profit attributable to owners of the parent of US$40.8 million and the payment of the
final 2013 dividend of US$8.2 million to shareholders during H1 2014.
Cash flow generation and capital management
Cash flow – continuing and discontinued operations
For the three months ended 30
June
(US$‟000)
(Unaudited)
Cash generated from operating activities
Cash used in investing activities
Cash (used in)/provided by financing activities
Increase/(decrease) in cash
Foreign exchange difference on cash
Opening cash balance
Closing cash balance
2014
76,381
(50,541)
(10,249)
15,591
(89)
254,094
269,596
2013
41,691
(102,943)
(20,263)
(81,515)
868
401,520
320,873
For six months ended 30 June
2014
127,107
(128,074)
(11,085)
(12,052)
(761)
282,409
269,596
2013
99,017
(208,822)
27,588
(82,217)
1,742
401,348
320,873
Cash flow from operating activities was US$127.1 million for H1 2014, an increase of US$28.1 million, when compared to H1
2013 (US$99.0 million). The increase primarily relates increased EBITDA, slightly offset by an investment in working capital.
The working capital investment of US$3.8 million related mainly to a decrease in trade payables of US$16.4 million due to the
timing of payments combined with an investment in gold inventory of US$14.6 million. This was offset by VAT refunds of
US$28.2 million received from the Tanzanian Government.
Cash flow used in investing activities was US$128.1 million for H1 2014, a decrease of 39% when compared to H1 2013
(US$208.8 million), driven by lower sustaining capital expenditure across all sites, lower expansion capital expenditure mainly
related to the Bulyanhulu CIL Expansion project and lower capitalised development expenditure at Buzwagi and North Mara.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
A breakdown of total capital and other investing capital activities for the six months ended 30 June is provided below:
(US$‟000)
(Unaudited)
For six months ended 30 June
2014
2013
Sustaining capital
Expansionary capital
Capitalised development
Total cash capital
Non-cash rehabilitation asset adjustment
1
Non-cash sustaining capital
20,724
26,809
68,963
116,496
14,918
(1,752)
58,987
53,866
94,357
207,210
(22,128)
1,846
Total capital expenditure
Other investing capital
129,662
186,928
(55)
1,612
11,633
-
2
- Non-current asset movement
-Cash flow related to the sale of Tulawaka
1
2
Total non-cash sustaining capital relates to the impact of capital accruals excluded from cash sustaining capital.
Non-current asset movements relates to the investment in the land acquisitions reflected as prepaid operating leases and Tanzania government receivables.
Sustaining capital
Sustaining capital expenditure included the investment in mine equipment of US$6.7 million, mainly relating to component
change outs at North Mara and Buzwagi and investment in tailings and infrastructure at North Mara (US$3.4 million), Bulyanhulu
(US$3.2 million), and Buzwagi (US$3.0 million).
Expansionary capital
Expansionary capital expenditure consisted mainly of the Bulyanhulu CIL Expansion project (US$24.9 million).
Capitalised development
Capitalised development capital includes capitalised stripping for North Mara (US$25.4 million) and Buzwagi (US$15.2 million)
and Bulyanhulu capitalised underground development of US$28.4 million.
Non-cash capital
Non-cash capital was US$13.2 million and consisted of reclamation asset adjustments (US$14.9 million) and the six months
increase in capital accruals (US$1.8 million). The reclamation adjustments were driven by lower US risk free rates driving lower
discount rates.
Other investing capital
The sale of Tulawaka to STAMICO resulted in a cash payment of the balance of the rehabilitation fund, less the transaction
consideration on completion, and amounted to US$11.6 million. During H1 2014 North Mara incurred land purchases totalling
US$5.3 million.
Cash flow used in financing activities for the six months ended 30 June 2014 was US$11.1 million, a decrease of US$38.7
million on H1 2014 (US$27.6 million inflow). The outflow primarily relates to payment of the final 2013 dividend of US$8.2 million
and finance lease payments of US$2.9 million.
Dividend
The final dividend for 2013 of US2.0 cents per share was paid to shareholders during May 2014. The Board of Directors have
approved an interim dividend for 2014 of US1.4 cents per share, payable to shareholders in September 2014.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Significant judgements in applying accounting policies and key sources of estimation uncertainty
Many of the amounts included in the consolidated interim financial statements require management to make judgements and/or
estimates. These judgements and estimates are continuously evaluated and are based on management‟s experience and best
knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the consolidated
financial information included in this release. Information about such judgements and estimation is included in the accounting
policies and/or notes to the consolidated interim financial statements, and the key areas are summarised below.
Areas of judgement and key sources of estimation uncertainty that have the most significant effect on the amounts recognised in
the consolidated interim financial statements include:














Estimates of the quantities of proven and probable gold reserves;
The capitalisation of production stripping costs;
The capitalisation of exploration and evaluation expenditures;
Review of goodwill, tangible and intangible assets‟ carrying value, the determination of whether these assets are impaired
and the measurement of impairment charges or reversals;
The estimated fair values of cash generating units for impairment tests, including estimates of future costs to produce
proven and probable reserves, future commodity prices, foreign exchange rates and discount rates;
The estimated useful lives of tangible and long-lived assets and the measurement of depreciation expense;
Property, plant and equipment held under finance leases;
Recognition of a provision for environmental rehabilitation and the estimation of the rehabilitation costs and timing of
expenditure;
Whether to recognise a liability for loss contingencies and the amount of any such provision;
Whether to recognise a provision for accounts receivable and the impact of discounting the non-current element;
Recognition of deferred income tax assets, amounts recorded for uncertain tax positions, the measurement of income tax
expense and indirect taxes;
Determination of the cost incurred in the productive process of ore stockpiles, gold in process, gold doré/bullion and
concentrate, as well as the associated net realisable value and the split between the long term and short term portions;
Determination of fair value of derivative instruments; and
Determination of fair value of stock options and cash-settled share based payments.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Going concern statement
The ABG Group‟s business activities, together with factors likely to affect its future development, performance and position are
set out in the operational and financial review sections of this report. The financial position of the ABG Group, its cash flows,
liquidity position and borrowing facilities are described in the preceding paragraphs of this financial review.
At 30 June 2014, the Group had cash and cash equivalents of US$269.6 million with a further US$150 million available under
the undrawn revolving credit facility which has been further extended until November 2016. Total borrowings at the end of the
year amounted to US$142 million, of which the first repayment is only repayable from 2015.
Included in other receivables are amounts due to the Group relating to indirect taxes of US$66.0 million which are expected to be
received within 12 months, but these will be offset to an extent by new claims submitted for input taxes incurred during 2014. The
refunds remain dependent on processing and payments of refunds by the Government of Tanzania.
We expect that the above, in combination with the expected operational cash flow generated during the year, will be sufficient to
cover the capital requirements and other commitments for the foreseeable future.
In assessing the ABG Group‟s going concern status the Directors have taken into account the above factors, including the
financial position of the ABG Group and in particular its significant cash position, the current gold and copper price and market
expectations for the same in the medium term, and the ABG Group‟s capital expenditure and financing plans. After making
appropriate enquiries, the Directors consider that ABG and the ABG Group as a whole has adequate resources to continue in
operational existence for the foreseeable future and that it is appropriate to adopt the going concern basis in preparing the
consolidated interim financial statements.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Non-IFRS Measures
ABG has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures
disclosed by management are provided as additional information to investors in order to provide them with an alternative method
for assessing ABG‟s financial condition and operating results. These measures are not in accordance with, or a substitute for,
IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures
are explained further below.
Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue:
- Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and
- Export duties.
Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as
royalties, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments,
unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social
responsibility charges. Cash cost is calculated net of co-product revenue. Refer to page 15 for a reconciliation to cost of sales.
The presentation of these statistics in this manner allows ABG to monitor and manage those factors that impact production costs
on a monthly basis. Cash cost per ounce sold is calculated by dividing the aggregate of these costs by gold ounces sold. Cash
costs and cash cost per ounce sold are calculated on a consistent basis for the periods presented.
All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is in accordance with the World Gold Council‟s
guidance issued in June 2013. It is calculated by taking cash cost per ounce sold and adding corporate administration costs,
reclamation and remediation costs for operating mines, corporate social responsibility expenses, mine exploration and study
costs, capitalised stripping and underground development costs and sustaining capital expenditure. This is then divided by the
total ounces sold. A reconciliation between cash cost per ounce sold and AISC is presented below:
(Unaudited)
(US$/oz sold)
Cash cost per ounce sold
Corporate administration
Share based payments
Rehabilitation
Mine exploration
CSR expenses
Capitalised development
Sustaining capital
Total continuing operations
Three months ended 30 June 2014
Three months ended 30 June 2013
Buzwagi
ABG Group
ongoing
operations
Buzwagi
ABG Group
ongoing
operations
919
40
2
8
2
2
330
45
561
36
19
2
12
187
76
837
39
(4)
6
1
9
112
78
749
45
9
12
2
11
209
68
936
61
7
3
5
217
146
684
35
(1)
31
16
26
313
162
1,054
57
24
2
3
391
101
862
54
(3)
21
8
18
303
141
1,348
893
1,078
1,105
1,375
1,266
1,632
1,404
Bulyanhulu
North
Mara
Discontinued operations
Total
(Unaudited)
(US$/oz sold)
Cash cost per ounce sold
Corporate administration
Share based payments
Rehabilitation
Mine exploration
CSR expenses
Capitalised development
Sustaining capital
Total continuing operations
Bulyanhulu
North
Mara
0
12
1,105
1,416
Six months ended 30 June 2014
Six months ended 30 June 2013
Buzwagi
ABG Group
ongoing
operations
867
41
2
7
2
4
281
45
584
34
1
19
1
15
185
97
879
38
4
7
1
14
164
62
752
42
15
12
2
13
208
74
1,033
81
(1)
8
4
5
274
177
739
40
(1)
34
16
29
222
234
918
55
(1)
21
3
4
429
214
876
56
(12)
23
8
20
300
212
1,249
936
1,169
1,118
1,581
1,313
1,643
1,483
Bulyanhulu
North
Mara
Discontinued operations
Total
Bulyanhulu
North
Mara
Buzwagi
ABG Group
ongoing
operations
0
24
1,118
1,507
AISC is intended to provide additional information on the total sustaining cost for each ounce sold, taking into account
expenditure incurred in addition to direct mining costs, depreciation and selling costs.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as
royalties, by-product credits, and production taxes, and exclude capitalised production stripping costs, inventory purchase
accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and
amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Cash costs per
tonne milled are calculated by dividing the aggregate of these costs by total tonnes milled.
EBITDA is a non-IFRS financial measure. ABG calculates EBITDA as net profit or loss for the period excluding:
-
Income tax expense;
Finance expense;
Finance income;
Depreciation and amortisation;
Impairment charges of goodwill and other long-lived assets; and
Discontinued operations.
EBITDA is intended to provide additional information to investors and analysts. It does not have any standardised meaning
prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in
operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as
determined under IFRS. Other companies may calculate EBITDA differently.
EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for depreciation and amortisation and goodwill impairment
charges.
Mining statistical information
The following describes certain line items used in the ABG Group‟s discussion of key performance indicators:
- Open pit material mined – measures in tonnes the total amount of open pit ore and waste mined.
- Underground ore tonnes hoisted – measures in tonnes the total amount of underground ore mined and hoisted.
- Total tonnes mined includes open pit material plus underground ore tonnes hoisted.
- Strip ratio – measures the ratio of waste-to-ore for open pit material mined.
- Ore milled – measures in tonnes the amount of ore material processed through the mill.
- Head grade – measures the metal content of mined ore going into a mill for processing.
- Milled recovery – measures the proportion of valuable metal physically recovered in the processing of ore. It is generally
stated as a percentage of the metal recovered compared to the total metal originally present.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
Risk Review
We have made a number of further developments in the identification and management of our risk profile over the course of H1
2014 and where appropriate, risk ratings have been reviewed against risk management controls and other mitigating factors.
Our principal risks continue to fall within four broad categories: strategic risks, financial risks, external risks and operational
risks and, while the overall makeup of our principal risks has not significantly changed from that published in the 2013 Annual
Report, there have been changes in certain risk profiles as a result of developments in our operating environment, in particular
enhancements made to operating and planning practices, and continuing uncertainties and trends within the wider global
economy and/or the mining industry. This has resulted in the following risks being removed from those risks previously viewed
as principal risks to ABG and its operations: (i) costs and capital expenditure; (ii) utilities supply; (iii) land acquisitions; and (iv)
loss of critical processes. Further details of these risks are provided in the 2013 Annual Report. In conjunction with this, we
believe it appropriate to add a new risk as a principal risk for the remainder of 2014, this being safety risks relating to mining
operations. This is due to the fact that, despite the significant health, safety and risk management systems that ABG has in
place for its underground and surface mining operations, mining and in particular underground mining is subject to a number of
hazards and risks in the workplace, such as fall of ground relating to underlying geotechnical risks, potential fires and mobile
equipment incidents, such that safety incidents in the workplace may unfortunately occur.
As a result of the review outlined above, for the remainder of 2014 we view our principal risks as relating to the following:

Single country risk

Reserves and resources estimates

Commodity prices

Political, legal and regulatory developments

Taxation reviews

Community relations

Environmental hazards and rehabilitation

Employer, contractor and industrial relations

Security, trespass and vandalism

Organisational restructuring

Safety risks relating to mining operations
Further detail as regards the nature of the new safety risks relating to mining operations is provided above. Further detail as
regards all other principal risks outlined above is provided as part of the 2013 Annual Report.
Directors’ Responsibility Statement
The Directors confirm that, to the best of their knowledge, the consolidated interim financial information has been prepared in
accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R and Disclosure and Transparency Rule 4.2.8R, namely:

an indication of important events that have occurred during the first six months of the financial year and their impact
on the consolidated interim financial information, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and

material related-party transactions in the first six months of the financial year and any material changes in the related
party transactions described in the last Annual Report.
The Directors of African Barrick Gold plc are listed in the African Barrick Gold plc Annual Report for 31 December 2013. A list
of current Directors is maintained on the African Barrick Gold plc website: www.africanbarrickgold.com.
On behalf of the Board
Brad Gordon, Chief Executive Officer
Kelvin Dushnisky, Chairman
African Barrick Gold Half Year Report for the six months ended 30 June 2014
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LSE: ABG
Auditor’s Review Report
Independent review report to African Barrick Gold plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed the consolidated interim financial information, defined below, in the interim financial statements of African
Barrick Gold Plc for the six months ended 30 June 2014. Based on our review, nothing has come to our attention that causes
us to believe that the condensed consolidated interim financial information are not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The condensed consolidated interim financial information, which are prepared by African Barrick Gold plc, comprise:

the consolidated balance sheet as at 30 June 2014;

the consolidated income statement and statement of comprehensive income for the period then ended;

the consolidated statement of cash flows for the period then ended;

the consolidated statement of changes in equity for the period then ended; and

the explanatory notes to the condensed consolidated interim financial information.
As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual financial
statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed consolidated interim financial information included in the half-yearly financial report have been prepared in
accordance with International Accounting Standard 34, „Interim Financial Reporting‟, as adopted by the European Union and
the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What a review of condensed consolidated financial information involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, „Review
of Interim Financial Information Performed by the Independent Auditor of the Entity‟ issued by the Auditing Practices Board for
use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial
information.
Responsibilities for the condensed consolidated interim financial information and the review
Our responsibilities and those of the directors
The half-yearly financial report, including the condensed consolidated interim financial information, is the responsibility of, and
has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance
with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial information in the
half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for
no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants, London
24 July 2014
Notes:
(a)
(b)
The maintenance and integrity of the African Barrick Gold Plc website is the responsibility of the directors;
the work carried out by the auditors does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the financial statements since
they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
26
LSE: ABG
INTERIM FINANCIAL STATEMENTS
Consolidated Income Statement
For the six months ended 30
June
(Unaudited)
(Unaudited)
(US$‟000)
Notes
2014
2013 Restated
For the year ended 31
December
(Audited)
2013
CONTINUING OPERATIONS
Revenue
445,509
487,360
929,004
Cost of sales
(332,474)
(386,733)
(713,806)
Gross profit
113,035
100,627
215,198
Corporate administration
(18,892)
(13,722)
(32,157)
Exploration and evaluation costs
(10,995)
(7,715)
(16,927)
(4,307)
(6,228)
(12,237)
-
(910,989)
(1,044,310)
(12,782)
(15,597)
(30,424)
Corporate social responsibility expenses
Impairment charges
Other charges
7
Profit/(loss) before net finance expense and taxation
66,059
(853,624)
(920,857)
Finance income
8
630
995
1,670
Finance expense
8
(4,504)
(4,696)
(9,552)
62,185
(857,325)
(928,739)
Profit/(loss) before taxation
Tax (expense)/credit
9
(22,716)
184,648
187,959
39,469
(672,677)
(740,780)
886
(40,741)
(57,653)
Net profit/(loss) for the period
40,355
(713,418)
(798,433)
Net Profit/(Loss) attributable to:
Owners of the parent (net earnings/(loss))
40,822
(701,230)
(781,101)
39,469
(672,677)
(740,780)
1,353
(28,553)
(40,321)
(467)
(12,188)
(17,332)
10.0
(171.0)
(190.4)
Net profit/(loss) from continuing operations
DISCONTINUED OPERATIONS
Net profit/(loss) from discontinued operations
5
- Continuing operations
- Discontinued operations
Non-controlling interests
- Discontinued operations
Earnings/ (loss) per share:
- Basic and diluted earnings/(loss) per share (cents) from
continuing operations
10
9.6
(164.0)
(180.6)
- Basic and diluted earnings/(loss) per share (cents) from
discontinued operations
10
0.4
(7.0)
(9.8)
The notes on pages 32-44 form an integral part of this financial information.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
27
LSE: ABG
Consolidated Statement of Comprehensive Income
For the six months ended 30 June
(Unaudited)
(Unaudited)
(US$‟000)
Net profit/(loss) for the period
For the year
ended 31
December
(Audited)
2014
2013
2013
40,355
(713,418)
(798,433)
(1,037)
560
1,570
39,318
(712,858)
(796,863)
39,785
(700,670)
(779,531)
(467)
(12,188)
(17,332)
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss:
Changes in fair value of cash flow hedges
Total comprehensive income/ (loss) for the period
Attributed to:
- Owners of the parent
- Non-controlling interests
The notes on pages 32-44 form an integral part of this financial information.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
28
LSE: ABG
Consolidated Balance Sheet
(US$‟000)
ASSETS
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Deferred tax assets
Non-current portion of inventory
Derivative financial instruments
Other assets
Notes
12
13
Current assets
Inventories
Trade and other receivables
Derivative financial instruments
Other current assets
Cash and cash equivalents
13
Assets of disposal group classified as held for sale
Total assets
EQUITY AND LIABILITIES
Share capital and share premium
Other reserves
Total owners' equity
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Deferred tax liabilities
Derivative financial instruments
Provisions
Other non-current liabilities
14
13
Current liabilities
Trade and other payables
Derivative financial instruments
Provisions
Other current liabilities
13
Liabilities of disposal group classified as held for sale
Total liabilities
Total equity and liabilities
As at
30 June
(Unaudited)
2014
As at
30 June
(Unaudited)
2013
As at
31 December
(Audited)
2013
211,190
1,345,587
45,046
81,561
1,823
132,892
1,818,099
211,190
1,288,114
49,510
71,123
2,645
130,251
1,752,833
211,190
1,280,671
50,787
72,689
3,253
137,191
1,755,781
253,264
24,321
1,009
87,270
269,596
635,460
2,453,559
282,471
37,193
4,936
96,354
320,873
741,827
2,494,660
253,676
24,210
1,366
113,945
282,409
675,606
596
2,431,983
929,199
1,024,816
1,954,015
4,781
1,958,796
929,199
1,075,515
2,004,714
10,392
2,015,106
929,199
992,915
1,922,114
5,248
1,927,362
142,000
52,841
203
149,075
13,824
357,943
80,000
37,686
1,566
147,843
17,656
284,751
142,000
35,862
1,207
132,237
10,101
321,407
123,920
1,869
991
10,040
136,820
494,763
171,547
8,514
10,610
4,132
194,803
479,554
147,896
5,074
1,028
12,456
166,454
16,760
504,621
2,453,559
2,494,660
2,431,983
The notes on pages 32-44 form an integral part of this financial information.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
29
LSE: ABG
Consolidated Statement of Changes in Equity
Cash
flow
hedging
reserve
Stock
option
reserve
Retained
earnings/
(Accumulated
losses)
Total
owners'
equity
Total noncontrolling
interests
Total
equity
Share
capital
Share
premium
Contributed
surplus/Other
reserve
62,097
867,102
1,368,713
363
3,502
453,934
2,755,711
22,580
2,778,291
Total comprehensive income/(loss)
-
-
-
560
-
(701,230)
(700,670)
(12,188)
(712,858)
Dividends to equity holders of the Company
-
-
-
-
-
(50,441)
(50,441)
-
(50,441)
Stock option grants and valuation adjustments
-
-
-
-
114
-
114
-
114
62,097
867,102
1,368,713
923
3,616
(297,737)
2,004,714
10,392
2,015,106
Total comprehensive income/(loss) for the period
-
-
-
1,010
-
(79,871)
(78,861)
(5,144)
(84,005)
Dividends to equity holders of the Company
-
-
-
-
-
(4,101)
(4,101)
-
(4,101)
Stock option grants and valuation adjustments
-
-
-
-
362
-
362
-
362
62,097
867,102
1,368,713
1,933
3,978
(381,709)
1,922,114
5,248
1,927,362
-
-
-
(1,037)
-
40,822
39,785
(467)
39,318
-
-
-
-
-
(8,202)
(8,202)
-
(8,202)
-
-
-
-
318
-
318
-
318
62,097
867,102
1,368,713
896
4,296
(349,089)
1,954,015
4,781
1,958,796
Notes
(US$‟000)
Balance at 31 December 2012 (Audited)
Balance at 30 June 2013 (Unaudited)
Balance at 31 December 2013 (Audited)
Total comprehensive (loss)/income for the period
Dividends to equity holders of the Company
12
Stock option grants and valuation adjustments
Balance at 30 June 2014 (Unaudited)
The notes on pages 32-44 form an integral part of this financial information.
African Barrick Gold Half Year Report for the six months ended 30 June 2014
30
LSE: ABG
Consolidated Statement of Cash Flows
(US$‟000)
Cash flows from operating activities
Net profit/(loss) for the period
Adjustments for:
Tax expense/(credit)
Depreciation and amortisation
Finance items
Impairment charges
Profit on disposal of property, plant and equipment
Working capital adjustments
Other non-cash items
Cash generated from operations before interest and tax
Finance income
Finance expenses
Income tax paid
Net cash generated by operating activities
Notes
For the six months ended 30 June
(Unaudited)
(Unaudited)
2014
2013
9
Cash flows from investing activities
Purchase of property, plant and equipment
Investments in other assets
Cash flow related to the sale of Tulawaka
Acquisition of subsidiary, net of cash acquired
Other investing activities
Net cash used in investing activities
5
Cash flows from financing activities
Loans received
Dividends paid
Finance lease instalments
Net cash (used in)/generated by financing activities
14
11
Net decrease in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at 1 January
Cash and cash equivalents at period end
40,355
(713,418)
(798,433)
22,716
64,746
3,855
(4,113)
(3,785)
4,730
128,504
666
(2,063)
127,107
(184,648)
90,101
3,770
927,690
(86)
(25,856)
3,067
100,620
1,005
(2,608)
99,017
(187,959)
141,159
7,968
1,061,011
(175)
(41,165)
8,181
190,587
1,700
(5,172)
187,115
(116,496)
(83)
(11,633)
138
(128,074)
(207,210)
(2,032)
420
(208,822)
(373,101)
(8,289)
(588)
(4,872)
(386,850)
(8,202)
(2,883)
(11,085)
80,000
(50,441)
(1,971)
27,588
142,000
(54,541)
(5,137)
82,322
(12,052)
(761)
282,409
269,596
(82,217)
1,742
401,348
320,873
(117,413)
(1,526)
401,348
282,409
The notes on pages 32-44 form an integral part of this financial information .
African Barrick Gold results for the six months ended 30 June 2014
31
For the year
ended 31
December
(Audited)
2013
LSE: ABG
Notes to the Consolidated Interim Financial Information
1.
GENERAL INFORMATION
African Barrick Gold plc (the “Company”) is a public limited company, which is listed on the London Stock Exchange and
incorporated and domiciled in the UK. It is registered in England and Wales with registered number 7123187. The address of its
th
registered office is 5 Floor, No.1 Cavendish Place, W1G 0QF, United Kingdom.
Barrick Gold Corporation currently owns 63.9 percent of the shares of the Company and is the ultimate controlling party of the
Group.
This condensed consolidated interim financial information for the six months ended 30 June 2014 were approved for issue by the
Board of Directors of the company on 24 July 2014. The condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31
December 2013 were approved by the Board of Directors on 11 March 2014 and delivered to the Registrar of Companies. The
report of the auditors‟ on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain
any statement under section 498 of the Companies Act 2006. The condensed consolidated interim financial information has been
reviewed, not audited.
The Group‟s primary business is the mining, processing and sale of gold. The Group has three operating mines located in
Tanzania. The Group also has a portfolio of exploration projects located across Tanzania and Kenya.
2. BASIS OF PREPARATION OF THE CONDENSED ANNUAL FINANCIAL STATEMENTS
The condensed consolidated interim financial information for the six months ended 30 June 2014 has been prepared in
accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, „Interim Financial
Reporting‟ as adopted by the European Union. The condensed consolidated interim financial information should be read in
conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in
accordance with IFRS as adopted by the European Union.
The condensed consolidated interim financial information has been prepared under the historical cost basis, as modified by the
revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
The financial information is presented in US dollars (US$) and all monetary results are rounded to the nearest thousand
(US$‟000) except when otherwise indicated.
Where a change in the presentational format between the prior period and the current period financial information has been
made during the period, comparative figures have been restated accordingly. The following presentational changes were made
during the current period:

Presentation of the results of discontinued operations due to the sale of Tulawaka mine to STAMICO, the Tanzanian State
Mining Corporation. Refer to note 5 for a discussion of the transaction.
The group‟s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash
flow interest rate risk and price risk), credit risk and liquidity risk. The condensed interim financial statements do not include all
financial risk management information and disclosures required in the annual financial statements; they should be read in
conjunction with the group‟s annual financial statements as at 31 December 2013. There have been no changes in the risk
management department or in any risk management policies since the year end.
The impact of the seasonality on operations is not considered as significant on the condensed consolidated interim financial
information.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing the
consolidated interim financial information. Refer page 22 for the Going Concern statement.
3. ACCOUNTING POLICIES
The accounting policies adopted are consistent with those used in the African Barrick Gold plc annual financial statements for the
year ended 31 December 2013 except as described below.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual
earnings.
African Barrick Gold results for the six months ended 30 June 2014
32
LSE: ABG


IFRS 10, „Consolidated financial statements‟, IFRS 11, „Joint arrangements‟ and IFRS 12 „Disclosures of interests in
other entities‟. The adoption of these standards has had no effect on the financial statements for earlier periods and on
the interim financial statements for the period ended 30 June 2014 and is not expected to have a significant effect on
the results for the financial year ending 31 December 2014.
IFRIC 21 „Levies‟. IFRIC 21 addresses the accounting for a liability to pay a levy if that liability is within the scope of IAS
37 „Provisions‟. The interpretation addresses what the obligating event is that gives rise to pay a levy, and when should
a liability be recognised. The group is not currently subject to significant levies. The adoption of the interpretation has
had no significant effect on the financial statements for earlier periods and on the interim financial statements for the
period ended 30 June 2014. The group does not expect IFRIC 21 to have a significant effect on the results for the
financial year ending 31 December 2014.
There are no other new standards, interpretations or amendments to standards issued and effective for the period which
materially impacted on the Group.
The following exchange rates to the US dollar have been applied:
South African Rand (US$:ZAR)
Tanzanian Shilling (US$:TZS)
Australian Dollars (US$:AUD)
UK Pound (US$:GBP)
As at
30 June
2014
10.62
1,650
1.06
0.58
Average
six months
ended
30 June
2014
10.70
1,628
1.09
0.60
As at
30 June
2013
9.88
1,603
1.08
0.66
Average
six months
ended
30 June
2013
9.20
1,590
0.99
0.65
As at
31
December
2013
10.50
1,590
1.12
0.60
Average
year ended
31
December
2013
9.63
1,598
1.03
0.64
4. ESTIMATES
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may
differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in
applying the Group‟s accounting policies and the key sources of estimation uncertainty were the same as those that applied to
the consolidated financial statements for the year ended 31 December 2013, with the exception of changes in estimates that are
required in determining the provision for income taxes (see note 3).
5. DISCONTINUED OPERATIONS AND DISPOSAL GROUP ASSETS AND LIABILITIES HELD FOR SALE
On 15 November 2013, ABG announced that an agreement was reached with STAMICO, the Tanzanian State Mining
Corporation, whereby STAMICO would acquire the Tulawaka Gold Mine (“Tulawaka”) and certain exploration licences
surrounding Tulawaka for consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess
of 500,000 ounces, capped at US$0.5 million.
On 4 February 2014, ABG announced the completion of the sale. STAMICO has taken ownership and management of the
rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future
closure and rehabilitation liabilities for Tulawaka, and has indemnified the other parties to the agreement in relation to these
liabilities. The transfer was completed with a net cash payment of US$11.6 million by ABG to STAMICO for the balance of the
rehabilitation fund, less the transaction consideration. This resulted in a net gain on sale of assets of US$4.1 million. After non
operational costs incurred in the six months to 30 June 2014 and other closing adjustments, this resulted in a total cash outflow
year to date of US$14.4 million.
The financial results of Tulawaka have been presented as discontinued operations in the consolidated interim financial
information. The comparative results in the consolidated interim income statement have been presented as if Tulawaka had been
discontinued from the start of the comparative period.
African Barrick Gold results for the six months ended 30 June 2014
33
LSE: ABG
Below is a summary of the results of Tulawaka for the six months ended 30 June 2014 and 30 June 2013, and year ended 31
December 2013:
For the six months ended 30
June
(Unaudited)
(Unaudited)
(US$‟000)
Results of discontinued operations
Revenue
Cost of sales
Gross loss
Corporate administration
Exploration and evaluation costs
1
Corporate social responsibility expenses
Impairment charges
2
Other charges
Profit/(loss) before net finance expense and taxation
Finance income
Finance expense
Profit/(loss) before taxation
Tax expense
Net profit/(loss) for the period
For the year ended
31 December
(Audited)
2014
2013
2013
(92)
958
866
36
(16)
886
886
12,392
(28,151)
(15,759)
(1,187)
161
(690)
(16,701)
(6,496)
(40,672)
10
(79)
(40,741)
(40,741)
13,514
(30,368)
(16,854)
(1,311)
(3,259)
(16,701)
(19,442)
(57,567)
30
(116)
(57,653)
(57,653)
1 Corporate social responsibility expenses relate to projects supported from the ABG Maendeleo Fund.
2 Other charges consist of non-operational costs incurred since the cessation of operations.
6. SEGMENT REPORTING
The Group has only one primary product produced in a single geographic location, being gold produced in Tanzania. In addition
the Group produces copper and silver as a co-product. Reportable operating segments are based on the internal reports
provided to the Chief Operating Decision Maker (“CODM”) to evaluate segment performance, decide how to allocate resources
and make other operating decisions. After applying the aggregation criteria and quantitative thresholds contained in IFRS 8, the
Group‟s reportable operating segments were determined to be: North Mara gold mine; Tulawaka gold mine; Bulyanhulu gold
mine; Buzwagi gold mine; and a separate Corporate and Exploration segment, which primarily consist of costs related to
corporate administration and exploration and evaluation activities (“Other”).
Segment results and assets include items directly attributable to the segment as well as those that can be allocated on a
reasonable basis. Segment assets consist primarily of property, plant and equipment, inventories, other assets and receivables.
Capital expenditures comprise additions to property, plant and equipment. Segment liabilities are not reported since they are not
considered by the CODM as material to segment performance. The Group has also included segment cash costs.
Segment information for the reportable operating segments of the Group for the six months ended 30 June 2014 and 30 June
2013, and year ended 31 December 2013 is set out below.
African Barrick Gold results for the six months ended 30 June 2014
34
LSE: ABG
For the six months ended 30 June 2014
(Unaudited)
(US$‟000)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
Other charges and corporate social
responsibility expenses
EBITDA2
Impairment charges
Depreciation and amortisation7
EBIT2
Finance income
Finance expense
Profit before taxation
Tax expense
Net profit for the period
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Reclamation asset addition
Total capital expenditure
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces3
Cash cost per ounce sold2
Attributable to outside interests4
Attributable cash cost per ounce sold2
Cash cost per ounce sold2
Corporate administration charges
Rehabilitation - accretion and
depreciation
Mine site exploration costs
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure8
Attributable to outside interests4
All-in sustaining cost per ounce sold2
Segment carrying value5
North
Mara
176,669
280
176,949
(80,427)
(5,005)
Bulyanhul
u
130,319
8,426
138,745
(96,092)
(4,605)
Buzwagi
119,777
10,038
129,815
(91,259)
(4,008)
Other
(16,269)
Continuing
operations
426,765
18,744
445,509
(267,778)
(29,887)
Discontinued
operations6
-
Total
426,765
18,744
445,509
(267,778)
(29,887)
(6,196)
85,321
(4,519)
33,529
(6,596)
27,952
222
(16,047)
(17,089)
130,755
(64,696)
66,059
630
(4,504)
62,185
(22,716)
39,469
866
866
866
36
(16)
886
886
(16,223)
131,621
(64,696)
66,925
666
(4,520)
63,071
(22,716)
40,355
(35,724)
49,597
136
(1,263)
48,471
(14,783)
33,689
(20,063)
13,466
72
(766)
12,772
(3,507)
9,265
(7,470)
20,482
195
(1,230)
19,447
(5,835)
13,612
(1,439)
(17,486)
226
(1,246)
(18,506)
1,408
(17,097)
8,088
978
25,392
5,358
39,816
4,482
25,831
28,414
8,721
67,448
5,776
15,157
839
21,772
626
-
18,972
26,809
68,963
14,918
129,662
-
18,972
26,809
68,963
14,918
129,662
80,427
(280)
80,147
137,340
584
96,092
(8,426)
87,666
101,165
867
91,259
(10,038)
81,221
92,442
879
-
267,778
(18,744)
249,034
330,947
752
-
267,778
(18,744)
249,034
330,947
752
752
584
35
867
43
879
42
752
57
-
752
57
19
1
15
185
97
7
2
4
281
45
7
1
14
164
62
12
2
13
208
74
-
936
1,249
1,169
1,118
-
12
2
13
208
74
1,118
344,975
1,158,894
257,522
1,854,235
-
1,854,235
626
92,844
African Barrick Gold results for the six months ended 30 June 2014
35
LSE: ABG
For the six months ended 30 June 2013 (Restated)
9,611
Continuing
operations
464,690
22,670
487,360
(298,066)
(21,437)
Discontinued
operations6
12,365
27
12,392
(19,441)
(1,026)
(3,814)
33,670
(690,478)
(29,332)
(686,140)
221
(1,168)
(687,088)
146,754
(540,334)
(7,927)
1,684
(46,573)
(1,831)
(46,720)
24
(1,549)
(48,245)
7,507
(40,738)
(21,825)
146,032
(910,989)
(88,667)
(853,624)
995
(4,696)
(857,325)
184,648
(672,677)
(7,186)
(15,261)
(16,701)
(8,710)
(40,672)
10
(79)
(40,741)
(40,741)
(29,011)
130,771
(927,690)
(97,377)
(894,296)
1,005
(4,775)
(898,066)
184,648
(713,418)
15,546
52,421
24,102
(9,208)
82,861
20,657
41,338
(6,809)
55,186
85
941
1,026
60,250
53,866
94,357
(21,967)
186,506
583
(161)
422
60,833
53,866
94,357
(22,128)
186,928
96,538
(365)
96,173
130,200
739
98,425
(7,704)
90,721
87,802
1,033
103,103
(14,601)
88,502
96,367
918
-
298,066
(22,670)
275,396
314,369
876
19,441
(27)
19,414
7,950
2,442
317,507
(22,697)
294,810
322,319
915
(12)
903
Cash cost per ounce sold2
Corporate administration charges
Rehabilitation - accretion and
depreciation
Mine site exploration costs
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure8
Attributable to outside interests4
739
39
1,033
80
918
54
876
44
2,442
149
915
46
34
16
29
222
234
8
4
5
274
177
21
3
4
429
214
23
8
20
300
212
77
(20)
87
73
24
8
21
293
209
(9)
All-in sustaining cost per ounce sold2
1,313
1,581
1,643
1,483
2,808
1,507
456,914
1,052,184
209,064
1,797,815
-
1,797,815
(Unaudited)
(US$‟000)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
Other charges and corporate social
responsibility expenses
EBITDA2
Impairment charges
Depreciation and amortisation7
EBIT2
Finance income
Finance expense
Loss before taxation
Tax expense
Net loss for the period
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Reclamation asset reduction
Total capital expenditure
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces3
Cash cost per ounce sold2
Attributable to outside interests4
Attributable cash cost per ounce sold2
Segment carrying value5
North
Mara
194,992
365
195,357
(96,538)
(7,141)
Bulyanhulu
127,244
7,704
134,948
(98,425)
(7,439)
Buzwagi
142,454
14,601
157,055
(103,103)
(16,468)
(6,729)
84,949
(173,938)
(40,859)
(129,848)
170
(1,196)
(130,874)
33,278
(97,595)
(3,355)
25,729
(16,645)
9,084
581
(783)
8,882
(2,892)
5,990
23,962
504
28,917
(5,950)
47,433
Other
-
79,653
African Barrick Gold results for the six months ended 30 June 2014
36
LSE: ABG
Total
477,055
22,697
499,752
(317,507)
(22,463)
For the year ended 31 December 2013
(Audited)
(US$‟000)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
North
Mara
364,574
819
365,393
(172,894)
(13,026)
Bulyanhulu
262,539
16,882
279,421
(190,647)
(14,661)
Buzwagi
258,879
25,311
284,190
(202,286)
(20,976)
Other
(421)
Continuing
operations
885,992
43,012
929,004
(565,827)
(49,084)
Discontinued
operations6
13,483
31
13,514
(20,527)
(1,311)
Total
899,475
43,043
942,518
(586,354)
(50,395)
Other charges and corporate social
responsibility expenses
EBITDA2
Impairment charges
Depreciation and amortisation7
EBIT2
Finance income
Finance expense
Loss before taxation
Tax credit
Net loss for the year
(11,961)
167,512
(307,259)
(68,565)
(208,312)
327
(2,501)
(210,486)
44,283
(166,203)
(5,827)
68,286
(35,867)
32,419
662
(1,482)
31,599
(13,977)
17,622
(4,730)
56,198
(690,478)
(39,906)
(674,186)
406
(2,446)
(676,226)
146,990
(529,236)
(20,143)
(20,564)
(46,573)
(3,641)
(70,778)
275
(3,123)
(73,626)
10,663
(62,963)
(42,661)
271,432
(1,044,310)
(147,979)
(920,857)
1,670
(9,552)
(928,739)
187,959
(740,780)
(22,701)
(31,025)
(16,701)
(9,841)
(57,567)
30
(116)
(57,653)
(57,653)
(65,362)
240,407
(1,061,011)
(157,820)
(978,424)
1,700
(9,668)
(986,392)
187,959
(798,433)
38,386
949
65,594
(11,271)
93,658
25,193
114,912
45,428
(10,044)
175,489
31,589
60,136
(9,230)
82,495
690
1,608
2,298
95,858
117,469
171,158
(30,545)
353,940
583
(195)
388
96,441
117,469
171,158
(30,740)
354,328
172,894
(819)
172,075
260,945
659
190,647
(16,882)
173,765
195,304
890
202,286
(25,311)
176,975
187,348
945
-
565,827
(43,012)
522,815
643,597
812
20,527
(31)
20,496
8,778
2,335
586,354
(43,043)
543,311
652,375
833
(6)
827
659
38
890
72
945
51
812
50
2,335
149
833
51
29
12
31
251
207
7
3
6
233
133
15
2
4
321
168
18
6
19
266
175
86
6
371
66
1,227
1,344
1,506
1,346
3,013
19
6
24
262
173
(6)
1,362
367,326
1,116,142
253,344
1,817,817
10,489
1,828,306
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Reclamation asset reduction
Total capital expenditure
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces3
Cash cost per ounce sold2
Attributable to outside interests4
Attributable cash cost per ounce sold2
Cash cost per ounce sold2
Corporate administration charges
Rehabilitation - accretion and
depreciation
Mine site exploration costs
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure8
Attributable to outside interests4
All-in sustaining cost per ounce sold2
Segment carrying value5
81,005
1 The CODM reviews cash operating costs for the three operating mine sites separately from corporate administration costs and exploration costs. Consequently, the
Group has reported these costs in this manner.
2 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ”Non IFRS measures” on page 23 for definitions.
3 Reflects 100% of ounces sold.
4 Reflects the adjustment for non-controlling interests at Tulawaka.
5 Segment carrying values are calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets
and include outside shareholder‟s interest.
6 Represents Tulawaka which has been discontinued.
7 Depreciation and amortisation includes the depreciation component of the cost of inventory sold.
8 Sustaining capital expenditure for the purposes of all-in sustaining cost per ounce sold includes land purchases which are classified as long term prepayments in the
balance sheet.
African Barrick Gold results for the six months ended 30 June 2014
37
LSE: ABG
7.
OTHER CHARGES
For the six months ended
30 June
(Unaudited)
(Unaudited)
1
2014 2013 Restated
(US$‟000)
Other expenses
Operational Review costs (including retrenchment cost)
Foreign exchange losses (net)
Non-hedge derivative losses (net)
Government levies and charges
Bad debt expense
Disallowed indirect taxes
Legal costs
CNG related costs (residual)
Discounting of indirect tax receivables
Other
Total
For the year
ended
31 December
(Audited)
2013
5,317
7,794
527
401
1,931
15,970
1,629
40
4,807
1,159
3,784
1,018
2,374
1,375
16,186
13,305
7,203
2,387
1,369
1,463
3,138
3,246
1,375
3,617
37,103
Other income
Profit on disposal of property, plant and equipment
Insurance theft claim
Construction and consumable inventory gains
Non-hedge derivative gains (net)
Foreign exchange gains (net)
Other
Total
(45)
(2,748)
(395)
(3,188)
(86)
(111)
(392)
(589)
(99)
(2,958)
(3,622)
(6,679)
Total other charges
12,782
15,597
30,424
1 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5.
8.
FINANCE INCOME AND FINANCE EXPENSE
Finance income
For the six months ended
30 June
(Unaudited)
(Unaudited)
3
2014 2013 Restated
382
753
248
242
630
995
(US$‟000)
Interest on time deposits
Other
Total
African Barrick Gold results for the six months ended 30 June 2014
38
LSE: ABG
For the year
ended
31 December
(Audited)
2013
937
733
1,670
Finance expense
For the six months ended
30 June
(Unaudited)
(Unaudited)
3
2014
2013 Restated
2,457
2,145
1,194
1,510
1,972
757
164
333
313
396
376
312
6,476
5,453
(1,972)
(757)
4,504
4,696
(US$‟000)
1
Unwinding of discount
2
Revolving credit facility charges
Interest on CIL facility
Interest on finance lease liability
Bank charges
Other
Capitalised during the year – interest on CIL facility
Total
For the year
ended
31 December
(Audited)
2013
4,468
3,050
2,413
658
756
620
11,965
(2,413)
9,552
1 The unwinding of discount is calculated on the environmental rehabilitation provision.
2 Included in credit facility charges are the amortisation of the fees related to the revolving credit facility as well as the monthly interest and facility fees.
3 Restated due to the classification of Tulawaka as a discontinued operation. Refer to Note 5.
9.
TAX (CREDIT)/EXPENSE
For the six months ended
30 June
(Unaudited)
(Unaudited)
1
2014
2013 Restated
(US$‟000)
Current tax:
Current tax on profits for the period
Adjustments in respect of prior years
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Total deferred tax
Income tax expense/(credit)
For the year
ended
31 December
(Audited)
2013
-
28
28
40
40
22,716
22,716
22,716
(184,676)
(184,676)
(184,648)
(187,999)
(187,999)
(187,959)
1 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5.
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to the profits of the consolidated entities as follow:
(US$‟000)
Tax on profit/(loss) calculated at the Tanzanian tax rate of 30%
Tax effects of:
Prior year adjustments
Other non-deductible expenses
Effect of tax rates in foreign jurisdictions
Deferred tax assets not recognised
Income tax payable
Impairment of goodwill
Tax charge/(credit)
For the six months ended
30 June
(Unaudited)
(Unaudited)
2014
2013 Restated
18,655
(269,420)
254
(426)
4,233
22,716
93
(1,754)
73,540
(28)
12,921
(184,648)
African Barrick Gold results for the six months ended 30 June 2014
39
LSE: ABG
For the year
ended
31 December
(Audited)
2013
(292,917)
5,572
13,111
1,371
84,904
(187,959)
The tax rate in Tanzania is 30% (2013: 30%) and in South Africa 28% (2013: 28%).
Tax periods remain open to review by the Tanzania Revenue Authority (“TRA”) in respect of income taxes for 5 years following the
date of the filling of the corporate tax return, during which time the authorities have the right to raise additional tax assessments
including penalties and interest. Under certain circumstances the reviews may cover longer periods. Because a number of tax
periods remain open to review by tax authorities, there is a risk that transactions that have not been challenged in the past by the
authorities may be challenged by them in the future, and this may result in the raising of additional tax assessments plus penalties
and interest. The Group has previously accounted for an adjustment to unrecognised tax benefits in respect of tax losses to reflect
uncertainty regarding recoverability of certain tax losses. The Group makes no further provision in respect of such potential tax
assessments.
10. EARNINGS/ (LOSS) PER SHARE
Basic earnings/ (loss) per share (“EPS”) is calculated by dividing the net profit/ (loss) for the period attributable to owners of the
Company by the weighted average number of Ordinary Shares in issue during the period.
Diluted earnings/ (loss) per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to
assume conversion of all dilutive potential Ordinary Shares. The Company has dilutive potential Ordinary Shares in the form of
stock options. The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of
stock options.
At 30 June 2014, 30 June 2013 and 31 December 2013, (loss)/earnings per share have been calculated as follows:
For the six months ended
30 June
(Unaudited)
(Unaudited)
(US$‟000)
Earnings/(loss)
Net profit/(loss) from continuing operations attributable to owners of the parent
Net profit/(loss) from discontinued operations attributable to owners of the
parent
2014
2013 Restated
1
For the year
ended
31 December
(Audited)
2013
Restated
39,469
(672,677)
(740,780)
1,353
(28,553)
(40,321)
Weighted average number of Ordinary Shares in issue
Adjusted for dilutive effect of stock options
410,085,499
194,163
410,085,499
-
410,085,499
-
Weighted average number of Ordinary Shares for diluted earnings per share
410,279,662
410,085,499
410,085,499
10.0
9.6
171.0
(164.0)
(190.4)
(180.6)
0.4
(7.0)
(9.8)
Earnings/(loss) per share
Basic and dilutive earnings/(loss) per share from continuing operations (cents)
Basic and dilutive earnings/(loss) per share from discontinued operations
(cents)
1 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5.
11. DIVIDENDS
The final dividend declared in respect of the year ended 31 December 2013 of US$8.2 million (US2.0 cents per share) was paid
during 2014.
African Barrick Gold results for the six months ended 30 June 2014
40
LSE: ABG
12. PROPERTY PLANT AND EQUIPMENT
For the six months ended 30 June 2014
(Unaudited)
(US$‟000)
At 1 January 2014, net of accumulated
depreciation
Additions
Depreciation
Transfers between categories
2
At 30 June 2014
Plant and
equipment
Mineral properties
and mine
development costs
Assets under
construction¹
Total
296,299
(28,941)
44,126
311,484
596,166
(35,805)
62,477
622,838
388,206
129,662
(106,603)
411,265
1,280,671
129,662
(64,746)
1,345,587
At 1 January 2014
Cost
Accumulated depreciation
Net carrying amount
1,397,456
(1,101,157)
296,299
1,315,918
(719,752)
596,166
425,083
(36,877)
388,206
3,138,457
(1,857,786)
1,280,671
At 30 June 2014
Cost
Accumulated depreciation and impairment
Net carrying amount
1,441,472
(1,129,988)
311,484
1,378,395
(755,557)
622,838
448,142
(36,877)
411,265
3,268,009
(1,922,422)
1,345,587
For the six months ended 30 June 2013
(Unaudited)
(US$‟000)
Plant and
equipment
Mineral properties
and mine
development costs
Assets under
construction¹
Total
At 1 January 2013, net of accumulated
depreciation and impairment
Additions
Impairments
Depreciation
Transfers between categories
At 30 June 2013
945,118
(510,650)
(54,907)
74,457
454,018
819,063
(235,975)
(35,446)
104,360
652,002
210,859
186,928
(36,876)
(178,817)
182,094
1,975,040
186,928
(783,501)
(90,353)
1,288,114
At 1 January 2013
Cost
Accumulated depreciation and impairment
Net carrying amount
1,475,374
(530,256)
945,118
1,250,088
(431,025)
819,063
210,859
210,859
2,936,321
(961,281)
1,975,040
At 30 June 2013
Cost
Accumulated depreciation and impairment
Net carrying amount
1,549,580
(1,095,562)
454,018
1,354,447
(702,445)
652,002
218,970
(36,876)
182,094
3,122,997
(1,834,883)
1,288,114
African Barrick Gold results for the six months ended 30 June 2014
41
LSE: ABG
Mineral
properties and
mine
development
costs
Assets under
construction¹
945,118
(477)
(582,669)
(84,350)
18,677
819,063
(287,276)
(56,809)
121,427
210,859
354,328
(36,877)
(140,104)
1,975,040
354,328
(477)
(906,822)
(141,159)
-
296,299
(239)
596,166
388,206
(239)
1,280,671
At 1 January 2013
Cost
Accumulated depreciation and impairment
Net carrying amount
1,475,374
(530,256)
945,118
1,250,088
(431,025)
819,063
210,859
210,859
2,936,321
(961,281)
1,975,040
At 31 December 2013
Cost
Accumulated depreciation and impairment
Net carrying amount
1,397,456
(1,101,157)
296,299
1,315,918
(719,752)
596,166
425,083
(36,877)
388,206
3,138,457
(1,857,786)
1,280,671
(Audited)
(US$‟000)
For the year ended 31 December 2013
At 1 January 2013, net of accumulated
depreciation and impairment
Additions
Disposals/write-downs
Impairments
Depreciation
Transfers between categories
Reclassification to disposal group assets held for
sale
At 31 December 2013
Plant and
equipment
Total
1 Assets under construction represents (a) sustaining capital expenditures incurred constructing tangible fixed assets related to operating mines and advance deposits
made towards the purchase of tangible fixed assets; and (b) expansionary expenditure allocated to a project on a business combination or asset acquisition, and the
subsequent costs incurred to develop the mine. Once these assets are ready for their intended use, the balance is transferred to plant and equipment, and/ or
mineral properties and mine development costs.
2 The gain on disposal of assets reflected in the income statement relates to the assets disposed of in the sale of Tulawaka which were transferred to assets held for
sale in the year ended 31 December 2013.
Leases
Property, plant and equipment includes assets relating to the design and construction costs of power transmission lines and
related infrastructure. At completion, ownership was transferred to TANESCO in exchange for amortised repayment in the form of
reduced electricity supply charges. No future lease payment obligations are payable under these finance leases.
Property, plant and equipment also includes emergency back-up and spinning power generators leased at Buzwagi mine under a
three year lease agreement, with an option to purchase the equipment at the end of the lease term. The lease has been classified as
a finance lease.
Property, plant and equipment further includes drill rigs leased at Buzwagi mine under a one year rent to own lease agreement. The
lease has been classified as a finance lease.
The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease:
For the six months ended
30 June
(Unaudited)
(Unaudited)
2014
2013
70,764
68,846
(16,836)
(17,065)
53,928
51,781
(US$‟000)
Cost - capitalised finance leases
Accumulated depreciation
Net carrying amount
African Barrick Gold results for the six months ended 30 June 2014
42
LSE: ABG
For the year
ended
31 December
(Audited)
2013
70,764
(16,430)
54,334
13. DERIVATIVE FINANCIAL INSTRUMENTS
The table below analyses financial instruments carried at fair value, by valuation method. The Group has derivative financial
instruments in the form of economic and cash flow hedging contracts which are all defined as level two instruments as they are
valued using inputs other than quoted prices that are observable for the assets or liabilities. The following tables present the
group‟s assets and liabilities that are measured at fair value at 30 June 2014, 30 June 2013 and 31 December 2013.
Assets
(Unaudited)
(US$‟000)
For the six months ended 30 June 2014
Interest contracts: Designated as cash flow hedges
Currency contracts: Not designated as hedges
Commodity contracts: Not designated as hedges
Total
Liabilities
Current
Non-current
Current
Non-current
Net fair
value
66
943
1,009
1,823
1,823
1,204
665
1,869
203
203
619
(802)
943
760
Assets
(Unaudited)
(US$‟000)
For the six months ended 30 June 2013
Currency contracts: Designated as cash flow hedges
Interest contracts: Designated as cash flow hedges
Currency contracts: Not designated as hedges
Commodity contracts: Not designated as hedges
Total
Liabilities
Current
Noncurrent
Current
Non-current
Net fair
value
1,148
3,788
4,936
2,645
2,645
1,652
903
5,848
111
8,514
1,542
24
1,566
(1,652)
1,742
(6,242)
3,653
(2,499)
Assets
(Audited)
(US$‟000)
For the year ended 31 December 2013
Currency contracts: Designated as cash flow
hedges
Interest contracts: Designated as cash flow hedges
Currency contracts: Not designated as hedges
Commodity contracts: Not designated as hedges
Total
Liabilities
Current
Non-current
Current
Non-current
Net fair
value
158
1,208
1,366
3,191
3
59
3,253
1,168
3,666
240
5,074
353
449
387
18
1,207
(353)
1,574
(3,892)
1,009
(1,662)
14. BORROWINGS
During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of our key growth
projects, the Bulyanhulu CIL Expansion project (“Project”). The facility is collateralised by the Project, and has a term of seven
years with a spread over Libor of 250 basis points. The seven year facility is repayable in equal instalments over the term of the
facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate
swap. The full facility of US$142 million was drawn in 2013. Interest incurred on the borrowings has been capitalised to the asset
(US$2.0 million).
African Barrick Gold results for the six months ended 30 June 2014
43
LSE: ABG
15. COMMITMENTS AND CONTINGENCIES
The Group is subject to various laws and regulations which, if not observed, could give rise to penalties. As at 30 June 2014, the
Group has the following commitments and/or contingencies:
a)
Legal contingencies
As at 30 June 2014, the Group was a defendant in approximately 316 lawsuits. The plaintiffs are claiming damages and interest
thereon for the loss caused by the Group due to one or more of the following: unlawful eviction, termination of services, wrongful
termination of contracts of service, non-payment for services, defamation, negligence by act or omission, unpaid overtime and
public holiday compensation.
The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$163.6 million. The
Group‟s Legal Counsel is defending the Group‟s current position, and the outcome of the lawsuits cannot presently be determined.
However, in the opinion of the Directors and Group‟s Legal Counsel, no material liabilities are expected to materialise from these
lawsuits. Consequently no provision has been set aside against the claims in the books of account.
Included in the total amounts claimed is an appeal by the TRA intended for a tax assessment of US$21.3 million in respect of the
acquisition of Tusker Gold Limited. The case was awarded in favour of ABG however, the TRA has served a notice of appeal. The
calculated tax assessment is based on the sales price of the Nyanzaga property of US$71 million multiplied by the tax rate of 30%.
Management is of the opinion that the assessment is invalid due to the fact that the acquisition was for Tusker Gold Limited, a
company incorporated in Australia. The shareholding of the Tanzanian-related entities did not change and the Tusker Gold Limited
group structure remains the same as prior to the acquisition.
Also included in the total amounts claimed is TRA claims to the value of US$41.25 million for withholding tax on historic offshore
dividend payments paid by ABG to its shareholders. In addition to the claim, there are six other withholding tax claims which have
not been quantified. These claims are made on the basis that ABG is resident in Tanzania for tax purposes. Management are of
the opinion that the claims do not have substance and that they will be successfully defended.
b)
Tax-related contingencies
The TRA has issued a number of tax assessments to the Group relating to past taxation years from 2002 onwards. The Group
believes that these assessments are incorrect and has filed objections to each of them. The Group is attempting to resolve these
matters by means of discussions with the TRA or through the Tanzanian appeals process. During the year under review the Board
ruled in favour of BGML in relation to seven of ten issues raised by the TRA in final assessments for the 2000-2006 years under
review. The TRA filed a notice of intention to appeal against the ruling of the Board, while ABG has filed a counter appeal in
respect of Bulyanhulu to the Appeals Tribunal for all three items that were lost. The positions that were ruled against BGML were
sufficiently provided for in prior year results and management is of the opinion that open issues will not result in any material
liabilities to the Group.
16. RELATED PARTY BALANCES AND TRANSACTIONS
The Group has related party relationships with entities owned or controlled by Barrick Gold Corporation, which is the ultimate
controlling party of the Group.
The Company and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and service
transactions and other professional services arrangements with others in the Barrick Group. These transactions are under terms
that are on normal commercial terms and conditions. These transactions are not considered to be significant.
At 30 June 2014 the Group had no loans of a funding nature due to or from related parties (30 June 2013: zero; 31 December
2013: zero).
17. SUBSEQUENT EVENTS
The Board of the Company has approved an interim dividend of US1.4 cents per share for this financial year to be paid on 22
September 2014 to shareholders on the register on 29 August 2014.
African Barrick Gold results for the six months ended 30 June 2014
44
LSE: ABG
African Barrick Gold results for the six months ended 30 June 2014
45
LSE: ABG