Mining Journal > Finance > Stockpile: African Barrick on the rise

A positive set of half-year results has helped African Barrick Gold plc (ABG) be the week’s top gaining resource stock on the London main market.

ABG has overcome a series of issues at its Tanazanian gold mines this year to record a 21% year-on-year increase in net income to US$120 million. The company, which was last year spun-out by Canada’s Barrick Gold Corp, produced 345,857oz for the six months to end-June, a result in line with expectations. ABG’s performance pushed its stock almost 9% higher for the week in London, and the company has now partially recovered to be 14% lower for the year after a poor start in the opening months of 2011.

Most recently, seven people were killed at ABG’s North Marra mine in Tanzania during May as police withstood a criminal attack involving more than 800 intruders. Just days prior to that incident, a power outage and attempted plant restart caused malfunction in the SAG mill motor at the Buzwagi mine. This caused ABG to cut its production guidance by 10,000oz to in the range of 700,000-760,000oz for 2011.

In a tough week for mining stocks, Fresnillo plc and Central Rand Gold Ltd were two others to make notables gains by adding 4.5% and 4% respectively.

The majors all headed downward with BHP Billiton and Anglo American plc both falling around 4%. The companies announced (through joint venture Samancor Manganese) on July 29 that US$279 million would be spent on phase two of expansion at the GEMCO operation in the Northern Territory, Australia. Anglo American, also announced half year results on Friday, beating consensus earnings estimates.

Xstrata plc was the hardest hit of the large caps with a drop of about 5.5%, while Rio Tinto was 3% lower. The biggest faller for the week was Aquarius Platinum Ltd, which dropped more than 9%.

ATH Resources plc’s announcement of “preliminary discussions” with another company, made it one of the top gainers in the week on AIM with a 21% share price increase. The company is one of the largest coal producers in the UK.

Archipelago Resources plc also gained by about a fifth after the company released a market update. The company says it is on target to reach 80,000oz of gold equivalent production this year from its Toka Tindung gold mine in Indonesia. The operation is running at 65% of its design throughput following commissioning of the processing plant and completion of the initial stage of production ramp-up. The company also released some positive drilling results from a US$30 million exploration program currently underway at the project.

Red Rock Resources plc was also up strongly as the company provided updates on its gold interests. In Colombia, where the company is developing the El Limon mine, production is gradual improvement is taking place as new working practices are introduced. In Kenya, at the Migori gold project, drilling continues, with a new resource figure expected later this year. At the Macalder tailings site, a revised Resource estimate is under way and results will be announced shortly.