* Raises full-year production target to more than 700,000
* Aims to save more than $185 mln by year-end - CEO
* First-half net profit $40.8 mln vs year-earlier loss
* Shares rise as much as 5 pct
(Adds CEO comments, background, updates share price)
By Karen Rebelo
July 25 African Barrick Gold Plc
expects to push beyond its savings target of $185 million by the
end of the year as it cuts costs at its Tanzanian mines in
response to low gold prices.
African Barrick's shares, which have more than doubled in
the last year, rose as much as 5 percent on Friday after the
FTSE-250 company also raised its full-year production forecast.
Many gold and silver miners were forced to shelve new
projects and slash costs last year after prices of the precious
metals fell to their lowest in a decade. Gold fell 28
percent and silver plunged 36 percent in 2013.
"The new norm for the industry is cost control," African
Barrick Chief Executive Brad Gordon told Reuters in an
African Barrick launched an operational review in early
2013, focusing on boosting output and cutting costs after its
majority owner, Barrick Gold Corp, was unable to sell
the business to a Chinese company.
Gordon said the company was on track to meet, or possibly
surpass, its publicly stated cost-savings target of $185 million
without the need to sell any of its three operating mines.
"We're on a run rate of $175 million by the end of this
year. We expect that that will continue to improve," he said.
"The number we are targeting internally is $200 million of
saving by the end of this calendar year."
Cost cuts will continue beyond this year.
"There are still some opportunities to reduce our overall
workforce," Gordon said.
"There are still improvements to gain from changing the
mining methods ... particularly at Bulyanhulu, where we're
changing the mine completely to a mechanised system rather than
a hand-held system, which is a lot safer."
Expected production from the upper east zone at Bulyanhulu,
one of African Barrick's three mines in northern Tanzania, was a
factor in the company raising its full-year production forecast
to more than 700,000 ounces from 650,000-690,000 ounces.
Production rose 13 percent to 346,581 ounces in the six
months ended June 30. The average realised gold price for the
six months fell to $1,290 per ounce from $1,480 per ounce a year
African Barrick posted a profit of $40.8 million for the
first half of 2014, compared with a year-earlier loss, when it
took a writedown of $727 million on the value of some of its
The company declared an interim dividend of 1.4 cents.
African Barrick's shares were up 3.9 percent at 263.8 pence
at 1130 GMT on the London Stock Exchange.
(Editing by Ted Kerr, Gopakumar Warrier and Robin Paxton)