Profit triples for African Barrick Gold

Precious metal producer African Barrick Gold (ABG) saw full-year profit more than triple in 2010 due to higher gold prices.

For the full year to 31 December net profit for the FTSE 100 (UKX) constituent soared to $218.1 million, compared to $58.5 million in the same period in 2009 - a boost of 272%.

Revenue was also up 37% at $975 million compared to $711.1 million the year before. But cash costs per ounce of gold increased 7% to $569 over the period, due to a combination of "industry cost pressures, lower-than-expected production and additional spend on Buzwagi".

The firm said the fourth quarter was strong and saw sales for the year reach over 724,000 ounces, which was a 6% increase on 2009. But production for the full year was slightly down on the previous year, mainly due to production challenges at Buzwagi. Measures it took at Buzwagi to address this began to show positive effect during the fourth quarter, the group added.

Meanwhile Bulyanhulu and North Mara showed consistent production and cost performance throughout the year and the firm posted a successful year for exploration, with initial high grade underground resource declared at North Mara under the Gokona and Nyabigena pits.

Greg Hawkins, chief executive officer of the company, said: "Our key focus over this past year has been to ensure that our assets are positioned to generate long-term, consistent operating performance. This marks the approach African Barrick Gold will continue to take with the business.

"We ended the year with a net cash balance of over $400 million. For 2011 we expect to produce between 700,000 - 760,000 ounces of gold at a cash cost of between $590-$650 per ounce sold."

He added that the firm would continue to assess other opportunities to expand its asset base.