JOHANNESBURG (miningweekly.com) – Tanzania-focused gold producer African Barrick Gold (ABG) on Tuesday said its operational review was progressing well and that results were already emerging.

Canada-based Barrick Gold initiated the review in the first quarter after talks about potentially selling its 73.9%-owned ABG to China National Gold came to an end in January.

The operational review seeks to improve ABG’s performance, following a decline in 2012 earnings and revenue.

“We have made significant improvements to the Buzwagi operation, while North Mara is performing well, and Bulyanhulu is on track for recovery,” said CEO Greg Hawkins in a statement.

The review narrowed its focus to operating and capital costs, the organisational structure and corporate overheads, as well as mine planning, which were being assessed under three established “workstreams”.

A series of measures under the first workstream – which was tasked with the review of reviewed corporate overheads, exploration expenses and capital spend – promised to deliver year-on-year reductions of $50-million within the group’s sustaining capital; $25-million in exploration spend and $8-million in corporate overheads.

Further, this workstream, under which responsibility for the overall organisational structure also fell, was assessing the staffing requirements at the mine sites and offices, establishing the “appropriate mix” of employees and contractors and increasing the proportion of Tanzanian employees. Over the past 12 months, the number of international employees based in Tanzania had been reduced by 16%.

The second workstream, tasked with narrowing the firm’s largest expense – operating costs – identified areas of significant cost-reduction potential, such as maintenance, aviation, camp services, travel, vehicles and administration, consumables, contractor and external services, energy and security.

“We are making good progress on cost reductions through the operational review and we are well under way with a complete life-of-mine review of the assets,” Hawkins commented.

On the back of a volatile gold price, the third established workstream was currently reviewing the life-of-mine plans at each operation.

“Scenarios are also being run at different gold prices in order to ensure maximum flexibility at various potential price levels,” he noted.

ABG was also examining all future expansion capital, including other projects, in light of the current cash generation of the business and its other capital commitments.