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Barrick ends talks with CNG, embarks on operational review

8th January 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – Canada-based Barrick Gold on Tuesday committed to recalibrating its majority-owned Tanzania-based African Barrick Gold (ABG) asset after talks with China National Gold (CNG) came to an end.

Barrick, which entered into discussions in August to potentially sell all or part of its 73.9% stake in ABG to CNG, said it intended to undertake an operational review to improve the Tanzania-focused gold miner’s performance.

"While the discussions between CNG and Barrick have not led to a transaction, the process has re-emphasised the fundamental long-term value of ABG's portfolio and the scarcity of large-scale producing opportunities to enter the gold market in Africa,” ABG CEO Greg Hawkins said in a statement.

The group aimed to recalibrate operations to improve returns and enhance the certainty of delivery.

The operational review would maintain focus on value accretive production, cost and organisational structure and ensuring organic growth that is capital driven and prioritised by returns.

The review would also include an asset review based on cash flow generation, as opposed to scale, and ensuring that a social licence to operate was a prerequisite for all operations and assets.

The group aimed to increase production at its strong-performing flagship Bulyanhulu mine and improve its social licence at North Mara, following the renewal of its mining licence.

Despite a failure to reach targets at Buzwagi, a greater consistency of performance following a range of initiatives has been visible, ABG commented.

Further, investments into exploration activities delivered a 20% increase in reserves and resources and the group acquired an extensive and highly prospective land package in Kenya.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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