African Barrick Gold hurt by power problems in Tanzania

LONDON (ShareCast) - African Barrick Gold (ABG), the Tanzania-focused gold producer, saw production drop 11% in the final three months of last year compared to the same period of 2010. The amount of gold it actually sold dropped a full 21% over the quarter. Explaining the sharp declines ABG's Chief Executive, Greg Hawkins, said the unreliable power supply in Tanzania was to blame. The company has now installed a 16 megawatt back-up generator to prevent outtages. The full-year figures for ABG look better, but production was still down 2% on 2010 and sales fell 3%. The firm has had one major factor in its favour, however, the gold price has gained 28% over the last 12 months, 19% in the last quarter alone. ABG confirms this has had a significant impact on earnings, with the cash position at around $584m by the end of 2011. Over the last 12 months ABG's share price has dropped 18%. News of the production decrease has seen the stock drop sharply in very early trading, at 8.06am it was down 2.7%. BS