African Barrick Gold plc ( ABG ) reports half year 2013 results

Transcription

1 30 July 2013 Results for the 6 months ended 2013 (Unaudited) Based on IFRS and expressed in US Dollars (US$) African Barrick Gold plc ( ABG ) reports half year 2013 results We have delivered strong operational performance in the first half, with production tracking ahead of guidance and cash costs below the bottom of the guidance range, said Greg Hawkins, Chief Executive Officer of African Barrick Gold. We have taken decisive action at all of our mines, including the reshaping of the life of mine at Buzwagi, in order to adapt to the lower gold price environment. We have a solid base from which to implement the findings of the Operational Review, which has identified potential cost savings of US$185 million across the group. The combination of asset optimisation focused on cash flow generation and lower gold price assumptions has contributed to a non-cash post tax impairment charge of US$727 million. Having taken these steps, we remain confident in the ability of our asset base to deliver shareholder value which is reflected in the decision to continue with our stated dividend policy. We remain on track to achieve our full year guidance. First Half Highlights ABG reports adjusted net earnings 2 of US$39.3 million (US9.6 cents per share), after one-off adjustments of US$741 million, primarily due to non-cash impairment charges of US$727 million, post tax related to Buzwagi (US$543 million), North Mara (US$128 million), Tulawaka (US$17 million) and Nyanzaga (US$39 million). The net loss amounted to US$701.2 million (a loss of US171.0 cents per share) and operational cash flow was US$99.0 million. Other significant highlights include: H1 gold production 1 of 311,838 ounces and cash costs 2 of US$903 per ounce sold (US$876 excluding Tulawaka) Q2 gold production 1 of 165,733 ounces and cash costs 2 of US$879 per ounce sold (US$862 excluding Tulawaka) Revenue of US$499.8 million and adjusted EBITDA 2 of US$139.9 million H1 all-in sustaining costs 2 of US$1,507 per ounce sold (US$1,483 excluding Tulawaka) Cash balance of US$321 million as at 2013 Targeted annual cost savings of US$185 million identified through the Operational Review Bulyanhulu CIL Expansion project remains on track for first production in Q Proposed interim dividend of US 1.0 cent per share Operational Review Update As previously communicated, we initiated a comprehensive Operational Review of our entire business earlier this year with the aim of making sustainable and meaningful reductions to our cost base, optimising our life of mine plans and as a result driving improved returns from our asset base. The Review has identified US$185 million of potential savings, with over US$100 million of the savings expected to be realised in The overall savings consist of: US$95 million of operating cost reductions US$15 million reduction in corporate administration expenses US$50 million reduction in sustaining capital expenditure US$25 million reduction in exploration spend Whilst the review remains ongoing, we have so far identified operating cost savings of up to US$95 million (approximately a 15% reduction), and corporate overhead savings of US$15 million (approximately a 30% reduction). All savings are based off 2012 reported numbers. We have also absorbed inflationary and volume increases at each of our mines in Volumes have significantly increased at Buzwagi; but we have absorbed the additional costs and still expect reductions year on year. Of the operating cost savings targeted, around US$55 million are attributed to Bulyanhulu, US$25 million to North Mara and US$15 million to Buzwagi. This is in addition to the previously announced savings of US$50 million in sustaining capital and US$25 million in our exploration spend from In addition to this we have re-engineered the Buzwagi mine plan with the aim of further lowering the all-in sustaining cost of the operation and ensuring its sustainability at current gold prices. This has involved optimising the Stage 3 cut back and removing the majority of the Stage 4 cut back from the mine plan which substantially reduces the amount of waste movement required and optimises the grade as well as recoveries. As a result, the mine life of the operation has been shortened to six and a half years, with mining ceasing after three and a half years and stockpiles on hand being processed for a further three years thereafter. African Barrick Gold Half Year Report for the six months ended LSE: ABG

2 Key statistics Three months ended Six months ended (Unaudited) Tonnes mined (thousands of tonnes) 15,141 11,834 29,142 21,673 Ore tonnes mined (thousands of tonnes) 1,727 1,848 3,402 3,595 Ore tonnes processed (thousands of tonnes) 2,103 1,840 4,048 3,742 Process recovery rate (percent) 88.5% 87.4% 88.7% 86.7% Head grade (grams per tonne) Attributable gold production (ounces) 1 165, , , ,742 Attributable gold sold (ounces) 1 171, , , ,641 Copper production (thousands of pounds) 3,122 3,121 5,584 6,126 Copper sold (thousands of pounds) 2,756 3,443 6,113 5,959 Cash cost per tonne milled (US$) Per ounce data (US$) Average spot gold price 3 1,415 1,609 1,523 1,651 Average realised gold price 2 1,366 1,591 1,480 1,642 Total cash cost All-in sustaining cost 2 1,416 1,536 1,507 1,465 Average realised copper price (US$/pound) Financial results Three months ended Six months ended (Unaudited) (US$ 000) Revenue 245, , , ,467 Cost of sales (210,209) (196,215) (414,884) (374,737) Gross profit 34,894 70,715 84, ,730 Corporate administration 5 (9,022) (10,095) (14,909) (24,985) Exploration and evaluation costs (3,156) (3,870) (7,554) (10,385) Corporate social responsibility expenses (3,472) (4,611) (6,918) (6,750) Impairment charges (927,690) - (927,690) - Other charges (18,279) (1,360) (22,093) (4,275) (Loss)/profit before net finance cost (926,725) 50,779 (894,296) 113,335 Finance income ,005 1,079 Finance expense 5 (2,218) (2,737) (4,775) (5,313) (Loss)/profit before taxation (928,533) 48,855 (898,066) 109,101 Tax credit/(expense) 198,906 (16,301) 184,648 (35,022) Net (loss)/profit for the period (729,627) 32,554 (713,418) 74,079 Attributed to: - Non-controlling interests (7,683) (807) (12,188) Owners of the parent (net (loss)/earnings) (721,944) 33,361 (701,230) 73,709 African Barrick Gold Half Year Report for the six months ended LSE: ABG

3 Other Financial information Three months ended Six months ended (Unaudited, in US$ 000 unless otherwise stated) EBITDA 2,5 48,829 86, , ,104 Adjusted EBITDA 2,5 56,190 86, , ,104 Net (loss)/ earnings (721,944) 33,361 (701,230) 73,709 (Loss)/earnings per share (EPS) (cents) (176.0) 8.1 (171.0) 18.0 Adjusted net earnings 2 12,705 33,361 39,334 73,709 Adjusted net earnings per share (AEPS) (cents) Dividend per share (cents) Cash and cash equivalents 320, , , ,667 Cash generated from operating activities 41,691 62,345 99, ,102 Operating cash flow per share (cents) Capital Expenditure 6 86,088 78, , ,699 Draw down of long term debt (Borrowings) 30,000-80,000-1 Production and sold ounces reflect equity ounces which exclude 30% of Tulawaka s production and sales base. 2 Average realised gold price, total cash cost per ounce, all-in sustaining cost per ounce, cash cost per tonne milled, EBITDA, adjusted EBITDA, adjusted net earnings, adjusted net earnings per share and operating cash flow per share are non-ifrs financial performance measures with no standard meaning under IFRS. Refer to Non IFRS measures on page 25 for definitions. 3 Reflect the London PM fix price. 4 Restated for the impact of capitalised stripping due to the adoption of IFRIC Three and six months ended 2012 restated to reclassify bank charges from corporate administration to finance expense. 6 Includes non-cash reclamation asset adjustments and finance lease purchases in Second Quarter Review The second quarter witnessed strong performance at both North Mara and Buzwagi with production up 54% and 33% respectively on the prior year periods. At Bulyanhulu, the mine made good progress towards returning to normalised mining rates with production up 44% on the first quarter of Buzwagi continued to show both year on year and quarter on quarter improvements on all key operating metrics, most notably with mill throughput ahead of nameplate capacity in Q2. Although head grade was 7% lower than the prior year due to the blending of stockpiles for mill feed, increased recovery rates and improved mill throughput rates drove production of 45,726 ounces, a 33% increase on Q At North Mara, mining continued from the higher grade zones in Gokona resulting in a head grade of 3.6 grams per tonne (g/t). Mill recovery rates increased to 87.0%, predominantly as a result of the 2012 gold plant upgrade further assisted by the higher grade ore processed. As a result, production for the quarter amounted to 63,774 ounces, an increase of 54% on Q At Bulyanhulu, the impact from the operational issues experienced in Q and Q resulted in production of 54,938 ounces, 21% below the prior year period as a result of lower throughput and head grade. During the quarter the mine s workforce was returned to normal levels and we continued to add paste fill capacity which led to production increasing 44% over Q At Tulawaka, the focus was on the commencement of the closure process. As a result of the continued clean-up of the site and the process plant, 1,294 ounces were produced in the quarter. All mining and milling activities have now ceased and we are in discussions with the Government to finalise the ultimate future use of the site. Total tonnes mined amounted to 15.1 million tonnes, an increase of 28% from 11.8 million in 2012, mainly driven by increased mining rates at Buzwagi and North Mara. Ore tonnes mined of 1.7 million tonnes were 7% lower than in 2012 as a result of the reduction at Buzwagi, which was partially offset by an increase in ore tonnes mined at North Mara due to the continued mining of high grade zones in Gokona. Ore tonnes processed amounted to 2.1 million tonnes, an improvement of 14% from Increased throughput at Buzwagi due to a stable power supply and process plant improvements was partially offset by lower throughput at North Mara. Head grade for the quarter of 2.8 g/t was 7% lower than in 2012 (3.0 g/t). This was due to an increased proportion of group throughput being from Buzwagi, where more lower grade material was processed. Our total cash costs of US$879 per ounce sold (US$862 per ounce excluding Tulawaka) were 4% lower than Q The decrease was primarily due to increased capitalised stripping costs at Buzwagi and North Mara (US$149/oz). This was partially offset by increased energy and fuel costs (US$15/oz) and increased consumable and contracted service costs (US$26/oz) due to the increased mining and milling activity, and an increased change in inventory charge due to the drawdown of higher cost inventory, partially offset by the increased production base (US$60/oz). All-in sustaining cost per ounce sold ( AISC ) of US$1,416 (US$1,404 excluding Tulawaka) was 8% lower than Q2 2012, driven by lower cash costs, corporate administration costs and a higher production base. Cash costs of US$72 per tonne milled for the quarter have decreased by 8% on 2012 (US$78 per tonne), primarily as a result of the above factors and the increased group throughput. African Barrick Gold Half Year Report for the six months ended LSE: ABG

4 Gold sales amounted to 171,702 ounces, and were 4% higher than production, as finished gold on hand at Bulyanhulu and North Mara at the beginning of the quarter was sold. Copper production for the quarter of 3.1 million pounds was in line with Q Increased production at Buzwagi was offset by lower production at Bulyanhulu. Revenue of US$245.1 million was 8% lower than Q as increased sales volumes were offset by a 14% decrease in the realised price of US$1,366 per ounce sold (US$1,591 per ounce sold in the prior year period). Realised prices were below the average gold price for the quarter due to sales being skewed towards the end of the quarter when the gold price was lower, as well as the revaluation of gold receivables under concentrate sales agreements, negatively impacted by lower June 2013 average prices. Adjusted EBITDA of US$56.2 million was 35% lower than in Q2 2012, mainly driven by lower revenue, an increased direct cost base as a result of higher production volumes (US$3.5 million) and increased other charges (US$16.9 million) due to the allocation of non-operational Tulawaka costs including retrenchments, costs associated with the Operational Review, and increased losses on currency hedges not qualifying for hedge accounting. Capital expenditure for the quarter amounted to US$86.1 million compared to US$78.4 million in Q Key capital expenditure included the Bulyanhulu CIL Expansion project (US$23.3 million) and Upper East project (US$4.4 million), capitalised stripping at Buzwagi and North Mara (US$39.7 million), capitalised underground development at Bulyanhulu (US$11.8 million) and sustaining capital investments in mining equipment, tailings and infrastructure at Bulyanhulu (US$4.7 million), Buzwagi (US$4.1 million) and North Mara (US$4.3 million). Included in capital expenditure is negative non-cash reclamation adjustments of US$17.3 million due a change to discount rates used in calculating the provision. First Half Review For the first half of 2013 revenue amounted to US$499.8 million with adjusted EBITDA of US$139.9 million. Adjusted EBITDA was down 24% on the prior year as a result of the lower realised gold price, activity driven increases in direct mining costs of US$12.1 million, and increased other charges of US$17.8 million. This was partially offset by a reduction in corporate administration costs of US$10.0 million and a reduction of US$2.8 million in exploration and evaluation costs. Cash generated from operating activities for the six months amounted to US$99.0 million which was US$40.9 million below adjusted EBITDA. This was mainly due to an increase in indirect tax receivables of US$41.8 million due to the change of VAT relief administration measures for mining companies by the Tanzanian Government during Q which impacts on the timing of receivables, partially offset by a reduction in inventories of US$17.6 million, a reduction in receivables of US$7.0 million and the impact of other charges of US$22.1 million. As a result, and combined with cash capital expenditures of US$207.2 million, the payment of the 2012 final dividend of US$50.4 million and the drawdown of US$80.0 million under the debt facility for the Bulyanhulu CIL Expansion project, our cash balance at the end of the June 2013 was down US$80.5 million from December 2012 at US$320.9 million. Operational Review The ongoing Operational Review is focused on five key areas: Operating cost reductions, Capital discipline, Organisational structure, Corporate overhead cost reductions and Mine planning deliverability. We have identified US$185 million of potential cost savings across these areas as detailed below: 1. Operating cost reductions - US$95 million The Operating Review project team have analysed in detail each area of operating cost expenditure in our business with the aim of identifying and quantifying all areas of potential savings as well as improving productivity and efficiency levels in each of these areas. They have subsequently developed implementation plans for each of these areas which will see the benefits predominantly achieved over the next 18 months. The key reductions by area identified are: Labour structure and controls - reduction of up to 20% from 2012 Procurement reduction of 5-10% from 2012 Maintenance reduction of 5-10% from 2012 Aviation, Camp Services, Travel, Vehicles and Administration reduction of 30-40% from 2012 Consumables reduction of 5-10% from 2012 Contract Management and External Services reduction of 5-10% from 2012 Security reduction of 15-20% from Capital discipline - US$50 million As previously announced, we plan to reduce our sustaining capital expenditure by approximately US$50 million compared to We are reassessing all of our future capital expenditure to identify further opportunities to cut capital expenditure into 2014 and beyond. In addition, we have decided to temporarily defer all expansionary capital projects other than the ongoing construction of the Bulyanhulu CIL Expansion project. This measure will help to preserve cash and ensure optionality as we move through and implement the Operational Review. African Barrick Gold Half Year Report for the six months ended LSE: ABG

5 Whilst this means we are delaying the decision on the Upper East Project at Bulyanhulu and we will incorporate the project into the review of the life of mine as part of the Operational Review as we decide how best to proceed with the future development of this key asset. Desktop work will continue at Nyanzaga in order to continue to improve our understanding of the structural controls of the mineralisation and ultimately to see if we can develop the mine with lower upfront capital expenditures. 3. Organisational structure 20% reduction in labour costs We have undertaken a zero based review of our entire organisation in order to ensure that we have the appropriate staffing levels, mix of employees and contractors and the optimal combination of international and Tanzanian employees in order to meet our objectives without impacting production. As a result, we have identified opportunities to reduce our overall labour costs by around 20% through a reduction in staffing levels reducing the proportion of international employees and improving labour controls. 4. Corporate overhead cost reductions - US$15 million As part of the zero based review of our organisation, we have also decided to simplify the corporate structure and reduce the scale of our support offices. As a result, we are targeting at least a US$15 million reduction to our corporate administration expenses, which incorporates the previously announced US$8 million reduction and represents over a 30% reduction in cost over Mine planning deliverability In addition to the review of our operating costs, we are in the process of reviewing of our life of mine plans at each of our operations and the options available to ABG to enhance cash flow generation in the near term. Buzwagi As Buzwagi is our highest cost and lowest grade mine we have focused on updating the mine plan there ahead of our other operations. The revised plan is aimed at significantly reducing the all-in sustaining cost of the mine and generating positive cash flow at current gold prices. The life of mine has been reduced to six and a half years, with mining ceasing after three and a half years and stockpiles on hand being processed thereafter. The new life of mine requires the movement of 7-8 million tonnes less of material on average for the next three and a half years which will substantially reduce our waste stripping costs. The current cost per tonne of material moved is approximately US$3.35. We will also be able to reduce sustaining capital given the age profile of the mining fleet and the reduced length of time mining operations will continue. We will also ensure that our workforce is appropriately sized for the level of ongoing activity. The revised life of mine cost profile will provide additional benefits over and above those detailed in the operating cost initiatives above. The mine is expected to remain predominantly on self generated power and therefore we expect mill throughput to remain at nameplate capacity, with similar recoveries to H Head grade is expected to average g/t over the next three and a half years, falling to approximately 1.0 g/t as we process stockpiles. The impact of the shortened mine life will result in the production of around 1.1 million ounces over the LOM which will result in the remaining reserves being a reclassified to resources. North Mara We are progressing our review at North Mara in order to optimise the remaining life of mine given the operating environment there. The final review will incorporate a number of factors, particularly the likely availability and cost of land and is expected to be completed during the second half of the year. At the same time, we have reassessed the asset based on a US$1,300 gold price and as a result we have removed the Nyabirama Stage 5 and Gokona Stage 4 cutbacks from the current mine plans which reduces the life of mine to 10 years and will result in the reclassification of approximately 0.5 Moz of reserves to resources. Bulyanhulu At Bulyanhulu the focus remains on ensuring that production is appropriate to the size of the ore body. We are reviewing the mine plan in order to optimise the value of the asset and ascertain the best methods for further developing the infrastructure in order to improve mining rates. We continue to expect the review to be completed during the second half of the year. Tulawaka As previously announced, one of the first steps in the Operational Review was to not extend the life of Tulawaka further given the cost profile of the operation. The mine has now ceased production and we are proceeding with closure activities while assessing potential opportunities to divest the asset. African Barrick Gold Half Year Report for the six months ended LSE: ABG

6 In addition to the above core elements of the Operational Review, we are following a number of other initiatives which we believe will deliver incremental value to the business. The most relevant of these include: Margin benefits and working capital savings As part of the maintenance programmes referred to above we are also targeting increased mobile equipment availability across our mine sites which we believe has significant potential to improve the margin benefits at those sites. We also have a number of grade control initiatives underway aimed at reducing dilution through improved blast monitoring systems at Buzwagi and North Mara, together with a reduction in overbreak at Bulyanhulu. With respect to working capital, we are implementing additional inventory management controls, assessing the potential for discounts for early payment opportunities with our major suppliers and optimising our supply chain processes. We have not factored the benefits from these programmes into the savings detailed above. Exploration As previously announced we have scaled back our exploration activities in 2013, resulting in a cost saving of $25 million when compared to This year we are focusing our exploration programme on potential high return programmes at Bulyanhulu and on two targets in the North Mara region. In Kenya we are undertaking extensive low cost sampling and testing of anomalies in order to prepare for future programmes. Due to our focused approach to exploration, we are in the process of rationalising our low priority exploration licenses, which will result in additional cost savings when complete. Implementation Timetable Of the US$95 million operational cost savings identified above, we estimate that 30% will have been achieved by the end of 2013 and over 90% by the end of In addition, the corporate G&A, capital and exploration savings will all be achieved in 2013 and we will be assessing the opportunity to make further reductions in 2014 and beyond. Other developments Carrying value review As a result of the substantial decrease in the gold price during the second quarter, we have decided to set the price at which we calculate the carrying value of our assets at US$1,300 per ounce sold. This has required us to review each of our cash generating units (CGU s) for any impairment trigger and to reassess the operating performance of each CGU in order to ensure optimised returns and cash flows in the lower gold price environment. Each of the operating mines and the exploration business are classified as separate CGU s. Buzwagi As reported in our 2012 annual report, Buzwagi s current cost structures combined with the low grade nature of the ore body made it susceptible to changes in the gold price. As a result, we have today announced an update to the mine plan at Buzwagi, which will significantly shorten the mine life, but reduces the AISC of the mine and will enable the mine to generate positive cash flow at current gold prices. The changes to both the mine plan and the long term gold price assumption triggered a review of the recoverable amount for Buzwagi. The review determined that the recoverable amount was less than the carrying value as at 2013, and therefore a post tax impairment of US$542.7 million has been recorded. Following the impairment, Buzwagi s carrying value is now US$209.1 million. Refer to note 7 of the consolidated financial information for more detail. North Mara At North Mara the change to the gold price assumption has triggered a review of the mine plan of the asset. As a result, we have updated the existing life of mine for the current cost structures and gold price which has resulted in the Nyabirama Stage 5 and Gokona Stage 4 cutbacks being deemed to be uneconomic. This has resulted in the removal of the projected production contained in those Stages from the recoverable value of North Mara which has triggered a review of the recoverable amount. As a result of the review, the recoverable amount is less than the carrying value as at 2013, and therefore a post tax impairment of US$128.1 million has been recorded. Following the impairment, North Mara s carrying value is now US$456.9 million. At the same time, we are progressing our review at North Mara in order to optimise the remaining life of mine and assess the viability of this given the current operating environment. This will incorporate a number of factors, in particular the availability and cost of land required to support mining activities. We expect to complete the review during the second half of the year, and should there be any further changes to the life of mine we will update the market in due course on any impact that it may have on the future carrying value. Refer to note 7 of the consolidated financial information for more detail. Bulyanhulu Given the flexibility provided by Bulyanhulu s high grade and long life reserve base and the fact that it is relatively less exposed to a decline in the gold price, a review of the mine plan was not considered necessary and as such we have not been required to test the asset for impairment. The current carrying value of Bulyanhulu is US$1,052.2 million. As part of the African Barrick Gold Half Year Report for the six months ended LSE: ABG

7 Operational Review we are progressing a review of the mine plan in order to optimise the value of this asset and when complete we will announce any changes together with their associated impact. Tulawaka As part of the closure process we have impaired US$16.7 million of inventory from the mine, as there is no other reasonable use for these supplies. The remaining Tulawaka book value of US$1.1 million will be recovered through usage over the closure period. Exploration - Nyanzaga project Since the acquisition of the remaining 49% interest in the Nyanzaga project which we did not already hold in April 2010, we have invested in the development of the mineral resource, which culminated in the update of the in-pit resource to in excess of 4.6Moz in January 2012, a fourfold increase from the resource at acquisition. Given the gold price outlook, and the initial results from the pre-feasibility work, we have decided to focus on further desktop analysis in order to continue to improve our understanding of the structural controls of the mineralisation and ultimately to see if we can develop the mine with lower upfront capital expenditures and an improved grade profile. As a result, we have reviewed the carrying value of the asset and have recorded a post-tax impairment of US$39.2 million at Following the impairment, Nyanzaga s carrying value is now US$46.0 million. Tulawaka Closure Process Following the end of mining operations in Q we have continued to progress the clean-up of the mine site ahead of formal commencement of closure activities. During the quarter we completed the stripping of all underground equipment from the mine, progressed the pit clearing, commenced the decommissioning of the process plant and completed the levelling of the Run-of-Mine ( ROM ) pad. We recovered 1,294 ounces from the clean-up of the ROM pad and the tanks in the process plant. We remain in discussions with the Tanzanian government, with regards to the ultimate end use of the mine site and will update the market in due course on any developments. All-in sustaining costs disclosure In July the World Gold Council issued guidance regarding cost reporting, and introduced a new metric All-in Sustaining Cost ( AISC ) which is designed to provide further transparency into the costs associated with gold mining and incorporate all costs associated with sustainable production. Whilst the guidance is not mandatory, ABG has decided to adopt the AISC metric in our reporting to ensure that we maintain the highest levels of transparency. We will continue to report cash costs in order to provide comparability to prior periods. All-in Sustaining Cost is calculated as: Cash Costs (which include royalties) + Corporate Social Responsibility expenses + Corporate G&A costs + Reclamation & remediation (operating mines) + Mine exploration and study costs (sustaining portions) + Capitalised stripping & underground mine development + sustaining capital expenditures. For the second quarter our AISC was US$1,416 per ounce (US$1,404 excluding Tulawaka) which was down 8% on the prior year period. Year to date our AISC is US$1,507 per ounce (US$1,483 excluding Tulawaka) which is up 3% on the first six months of One of the key objectives of our Operational Review and life of mine optimisation has been to substantially reduce our AISC per ounce by structurally reducing our cost base at the same time as ensuring that our ongoing mine plans consistently deliver positive cash flow in the current lower gold price environment. Board changes During the six months ended 2013, Kelvin Dushnisky was appointed as Chairman of the Board of Directors with Peter Tomsett and Graham Clow also joining the Board of Directors as Independent Non-Executive Directors. During the period both Kevin Jennings and Derek Pannell stepped down from the Board of Directors in order to pursue other interests. Mr Dushnisky is currently Senior Executive Vice President of Barrick Gold Corporation and is a key member of Barrick s senior management team. He has more than 25 years of experience in broad-ranging roles across the mining industry and has had a a close association with ABG s assets and business for nearly two decades. Mr Tomsett, who has taken the position as Senior Independent Director of ABG, has a wide range of technical, operational and senior management experience in the mining industry. He spent 20 years with Placer Dome Inc. in a number of senior roles, culminating in serving as President and Chief Executive Officer until its acquisition in Mr Clow is currently Chairman and Principal Mining Engineer of RPA Inc. He is a senior mining executive with 40 years experience in all aspects of acquisitions, exploration, feasibility, finance, development, construction, operations, and closure. Following these appointments, the ABG Board comprises ten members, including six Independent Non-Executive Directors, one Executive Director and three nominees from Barrick Gold Corporation. African Barrick Gold Half Year Report for the six months ended LSE: ABG

8 Indirect Taxation As previously announced our working capital position is currently being negatively impacted by the Tanzanian government s abolishment of VAT relief in Q4 2012, in contravention of our Mineral Development Agreements. The abolishment of VAT relief has led to an indirect tax receivable build up of US$75 million over the past 9 months, and it continues to accrue at US$7-8 million per month. We have been in discussions with the Government and have come to an agreement on setting up an escrow account for VAT on imports which is anticipated to reduce the level of outflows going forward and we will also seek to recover the amounts already accrued. We are continuing to negotiate on solutions in respect of VAT on local goods and services. Interim dividend The Directors are pleased to announce the approval of an interim dividend for 2013 of US1.0 cent per share. This demonstrates our commitment to capital returns to shareholders and also represents a sign of our confidence that we will be able to generate significant cost savings from the Operational Review and return the business to positive free cash generation. The interim dividend will be paid on 23 September 2013 to holders on record at 30 August The ex-dividend date will be 28 August ABG will declare the interim dividend in US dollars. Unless a shareholder elects to receive dividends in US dollars, they will be paid in pounds sterling with the US dollar interim dividend being converted into pounds sterling at exchange rates prevailing at the relevant time. The last date for receipt of currency elections will be 2 September The exchange rate conversion for the interim dividend will be made on or around 5 September Outlook Over the past six months we have delivered strong performance from our operating portfolio and we remain confident in the outlook for the remainder of the year. The drop in the gold price has necessitated changes to long term planning, but on the basis of those changes together with our cost reduction initiatives, we are well placed to deliver solid returns even in a lower gold price environment. As a result guidance for the year remains unchanged and we continue to target the upper end of the production range of 540, ,000 ounces of gold at a total cash cost of between US$925 - US$975 per ounce sold. With the changes to the sequencing of mine plans we expect to see a reduction in capitalised stripping and due to the deferral of projects we will also reduce our planned expenditure on expansionary project studies, bringing our total capital expenditure for the year down to US$425 million. African Barrick Gold Half Year Report for the six months ended LSE: ABG

9 For further information, please visit our website: or contact: African Barrick Gold plc +44 (0) Greg Hawkins, Chief Executive Officer Andrew Wray, Head of Corporate Development & Investor Relations Giles Blackham, Investor Relations Manager RLM Finsbury +44 (0) Faeth Birch / Charles Chichester About ABG ABG is Tanzania s largest gold producer and one of the five largest gold producers in Africa. We have three producing mines, all located in Northwest Tanzania, and several exploration projects at various stages of development in Tanzania and Kenya. We have a high-quality asset base, solid growth opportunities and a clear strategy of optimising, expanding and growing our business. Maintaining our licence to operate through acting responsibly in relation to our people, the environment and the communities in which we operate is central to achieving our objectives. ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ABG and have a secondary listing on the Dar es Salaam Stock Exchange. Historically and prior to our initial public offering (IPO), our operations comprised the Tanzanian gold mining business of Barrick Gold Corporation, our majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report. Conference call A presentation and conference call will be held for analysts and investors on 30 July 2013 at 09:30 BST with the dial-in details as follows: Participant dial in: +44 (0) / Password: ABG There will be a replay facility available until 6 August Access details are as follows: Replay number: +44 (0) Replay PIN: # In addition, there will be a conference call for analysts and investors based in North America at BST, with access details as follows: Participant dial in: +44 (0) / Password: ABG There will be a replay facility available until 6 August Access details are as follows: Replay number: +44 (0) Replay PIN: # FORWARD- LOOKING STATEMENTS This report and the information contained herein is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of ABG in any jurisdiction. This report includes forward-looking statements that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements and information regarding plans, objectives and expectations with respect to future production, projects, operations, costs, products, services and the Operational Review, and statements regarding future performance. Forward-looking statements are generally identified by the words plans, expects, anticipates, believes, intends, estimates, will and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, changes or developments in political, economic or business conditions in countries in which ABG conducts or may in the future conduct business, industry trends and developments, competition, fluctuations in the spot and forward price of gold and copper or certain other commodities (such as diesel fuel and electricity), changes in national or local legislation or regulation, currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), ABG s ability to successfully integrate acquisitions, ABG s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves and to process its mineral reserves successfully and in a timely manner, ABG s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in ABG s business strategy including, without limitation, ABG s ability to implement the Operational Review successfully, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry generally. Although ABG s management believes that the expectations reflected in such forward-looking statements are reasonable, ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this report. Any forward-looking statements in this report only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this report, whether as a result of new information or future events or changes in expectations or circumstances after the date of this report or otherwise. Nothing in this report should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that ABG s profits or earnings per share for any future period will necessarily match or exceed the historical published profits or earnings per share of ABG. African Barrick Gold Half Year Report for the six months ended LSE: ABG

10 LSE: ABG TABLE OF CONTENTS Interim Operating Review 11 Exploration and Development Update 15 Financial Update 18 Non-IFRS measures 25 Principle Risks and Uncertainties 27 Statement of Directors Responsibility 28 Auditors Review Report 29 Consolidated Income Statement and Consolidated Statement of Comprehensive Income 30 Consolidated Balance Sheet 31 Consolidated Statement of Changes in Equity 32 Consolidated Statement of Cash Flows 33 Notes to the consolidated interim financial information 34 African Barrick Gold Half Year Report for the six months ended LSE: ABG

11 Interim Operating review Bulyanhulu Key statistics Three months ended Six months ended (Unaudited) Underground ore tonnes hoisted Kt Ore milled Kt Head grade g/t Mill recovery % 90.7% 90.4% 91.0% 90.8% Ounces produced oz 54,938 69,750 92, ,586 Ounces sold oz 54,386 71,201 87, ,417 Cash cost per ounce sold US$/oz , All-in sustaining cost per ounce sold US$/oz 1,375 1,011 1,581 1,050 Cash cost per tonne milled US$/t Copper production Klbs 1,382 1,851 2,238 3,482 Copper sold Klbs 1,167 1,808 2,035 3,253 Capital expenditure US$( 000) 42,610 21,424 82,861 40,239 - Sustaining capital US$( 000) 7,951 8,412 15,546 15,059 - Capitalised development US$( 000) 11,822 9,440 24,102 22,126 - Expansionary capital US$( 000) 29, ,421 1,168 49,452 18,555 92,069 38,353 - Non-cash reclamation asset adjustments US$( 000) (6,842) 2,869 (9,208) 1,886 Operating performance Bulyanhulu continued to make progress against the recovery plan and produced 54,938 ounces during the quarter, 44% up on Q1 2013, and down 21% on the prior year period. As expected, we saw some ongoing impact from staffing shortages and the follow on impact of the Q1 production winder downtime in the early part of Q2, with production run rates improving as we moved through the quarter. Grade remained below plan due to the previously announced delays to paste-fill delivery which had a negative impact on underground development and mine sequencing. During the quarter we returned the workforce to normal levels and continued to add paste fill capacity by completing the drilling of further paste holes and by improving paste plant performance. As a result, we began to see improved access to high grade stopes towards the end of the period and expect to see a further improvement during the course of H2 2013, albeit with some variability as a result of the areas being mined. Copper production for the quarter of 1.4 million pounds was 25% lower than that of the same period in 2012, primarily due to a lower copper grade and lower throughput. Cash costs per ounce sold for the quarter of US$936 were 34% higher than the prior year of US$699, driven by a lower production base and resultant lower co-product revenue. AISC per ounce sold was 36% above the prior year period at US$1,375 per ounce as a result of the increased cash cost base, lower production levels and increased capitalised development costs. Cash costs per tonne milled increased to US$210 in Q (US$174 in Q2 2012) as a result of the lower mill throughput. Capital expenditure for the quarter of US$42.6 million was US$21.2 million higher than the prior year period (US$21.4 million) as a result of the expansionary capital spend on the CIL Expansion project (US$23.3 million) and the Upper East project (US$4.4 million). Included in capital expenditure is a negative non-cash reclamation adjustment of US$6.8 million. African Barrick Gold Half Year Report for the six months ended LSE: ABG

12 Buzwagi Key statistics Three months ended Six months ended (Unaudited) # # Tonnes mined Kt 8,475 7,088 17,305 11,991 Ore tonnes mined Kt 801 1,189 1,501 2,108 Ore milled Kt 1, ,290 1,765 Head grade g/t Mill recovery % 87.3% 85.6% 88.2% 83.9% Ounces produced oz 45,726 34,459 85,746 70,731 Ounces sold oz 44,556 37,928 96,367 71,249 Cash cost per ounce sold US$/oz 1,054 1, ,129 All-in sustaining cost per ounce sold US$/oz 1,632 1,872 1,643 1,709 Cash cost per tonne milled US$/t Copper production Klbs 1,740 1,270 3,346 2,644 Copper sold Klbs 1,589 1,636 4,078 2,707 Capital expenditure* US$( 000) 16,168 20,986 55,186 36,525 - Sustaining capital US$( 000) 4,512 14,736 20,657 21,832 - Capitalised development US$( 000) 17,427 4,107 41,338 12,696 21,939 18,843 61,995 34,528 - Non-cash reclamation asset adjustments US$( 000) (5,771) 2,143 (6,809) 1,997 # Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Operating performance We saw another strong operating performance at Buzwagi as the mine moved a record amount of material, and the mill operated above the nameplate capacity. With total ore tonnes below the plant capacity, we supplemented mined ore with lower grade stockpiles resulting in a grade of 1.4 g/t. In spite of the lower grade, we saw recoveries increase by 2% which together with the increased throughput drove production 33% higher than the previous period at 45,726 ounces. Gold ounces sold during the quarter trailed production by 3% due to the timing of production and shipments leaving site, but were 12% higher than production on a year to date basis. Improvements in the availability and utilisation of the mobile fleet, a continued focus on waste removal and commissioning of an additional shovel increasing waste mining capacity, resulted in total tonnes mined increasing by 20% over the prior year period. Due to the sequencing of the mine plan, ore tonnes mined of 800,549 tonnes were 33% lower than in With improved plant availability and efficiencies, mill throughput was ahead of nameplate capacity resulting in an increase of 43% in tonnes milled compared to Q As planned, the mill continues to operate largely on self generated power in order to mitigate the instability of grid power. Copper production for the quarter of 1.7 million pounds was 37% above the prior year s production. This was primarily due to the increased throughput. Cash costs for the quarter were US$1,054 per ounce sold compared to US$1,183 in Cash costs have been positively affected by the increased production base, increased capitalised stripping and a reduction in labour costs due to a reduction in international employees. AISC per ounce sold was 13% below the prior year period, but remains above spot gold prices. Cash cost per tonne milled of US$39 was 28% below that costs for the same period in 2012 due to increased throughput, combined with lower direct mining costs. We have re-engineered the mine plan at Buzwagi which will significantly reduce the AISC of the mine and enable positive free cash generation over the new life of mine. The LOM has been reduced to six and a half years and will result in the movement of 7-8Mt less of material on average for the next three and a half years which will substantially reduce our waste stripping costs. We expect mill throughput to remain at nameplate capacity, with similar recoveries to H Head grade is expected to average g/t over the next three and a half years, falling to approximately 1.0 g/t as we process stockpiles. The impact of the shortened mine life will result in the production of around 1.1 million ounces over the LOM which will result in the remaining reserves being a reclassified to resources. Capital expenditure for the quarter of US$16.2 million was 23% lower than the prior year period, with increased capitalised stripping (US$17.4 million) more than offset by a reduction in sustaining capital expenditure and a negative non-cash reclamation adjustment of US$5.8 million. African Barrick Gold Half Year Report for the six months ended LSE: ABG

13 North Mara Key statistics Three months ended Six months ended (Unaudited) # # Tonnes mined Kt 6,420 4,461 11,395 8,852 Ore tonnes mined Kt , Ore milled Kt ,280 1,337 Head grade g/t Mill recovery % 87.0% 82.8% 87.1% 81.1% Ounces produced oz 63,774 41, ,478 76,876 Ounces sold oz 71,150 41, ,200 79,600 Cash cost per ounce sold US$/oz All-in sustaining cost per ounce sold US$/oz 1,266 1,968 1,313 1,830 Cash cost per tonne milled US$/t Capital expenditure* US$( 000) 27,388 27,359 47,433 47,954 - Sustaining capital US$( 000) 9,184 13,370 23,962 21,178 - Capitalised development US$( 000) 22,270 9,903 28,917 20,966 - Expansionary capital US$( 000) 376 1, ,557 31,830 25,258 53,383 46,701 - Non-cash reclamation asset adjustments US$( 000) (4,442) 2,101 (5,950) 1,253 # Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Operating performance North Mara continued its strong performance from Q1 2013, and delivered gold production of 63,774 ounces for the quarter, an increase of 54% on 2012 driven by improved mine grade and recoveries. We continued to mine increased volumes of higher grade ore due to changes to the mine plan as a result of positive reconciliation from grade control drilling. We expect to see a reduction in the volume of higher grade ore and consequently in head grades during the second half of the year. Gold ounces sold amounted to 71,150 ounces for the quarter, an increase of 71% from 2012, which included approximately 7,000 ounces on hand at the beginning of the quarter. Head grade of 3.6 g/t increased by 57% from 2012, driven by increased ore mined from high grade areas in Gokona and a reduction in mill feed from the lower grade stockpiles. Recoveries of 87.0% increased by 4% from the prior year period, primarily as a result of the positive impact from the gold plant recovery project completed in 2012, and the increase in head grade. Total tonnes mined for the quarter amounted to 6.4 million tonnes, 44% higher than the same quarter in Ore tonnes mined of 680,792 were 82% higher than 2012 as a result of the waste stripping programme undertaken in 2012 opening higher grade ore areas in Gokona Stage 2 and changes to the mine plan as a result of the grade control model. Throughput was 6% lower than the prior year period as a result of plant downtime due to operational issues and maintenance work performed. Cash costs were US$684 per ounce sold compared to US$990 in the prior year period. The decrease in cash costs per ounce was driven by the increased production base and increased capitalised stripping. AISC per ounce was 36% lower than the prior year period as a result of the lower cash costs and the increase in ounces produced. On a per tonne basis, reduced throughput, together with increased energy and fuel costs, maintenance costs and consumables usage due to the increased mining activity led to an increase of 26% in cash cost per tonne milled. Capital expenditure for the quarter of US$27.4 million was in line with the prior year. Key capital expenditure included capitalised stripping (US$22.3 million) and investments in mine equipment, tailings and infrastructure (US$4.3 million). Included in capital expenditures is a negative non-cash reclamation adjustment of US$4.4 million. Land acquisition at North Mara remains a key issue and continues to be a priority focus for management. The Government task force has been progressing the valuation of land required for future mining activities and will commence the acquisition of these areas in Q We continue to make progress on meeting the final conditions for the lifting of the Environmental Protection Order ( EPO ) at North Mara and will provide further updates in due course. African Barrick Gold Half Year Report for the six months ended LSE: ABG

14 Tulawaka Key statistics (70%) Three months ended Six months ended (Unaudited) Underground ore tonnes hoisted Kt Open pit ore tonnes mined Kt Open pit waste tonnes mined Kt Ore milled Kt Head grade g/t Mill recovery % 113.5% 95.9% 99.0% 95.6% Ounces produced oz 1,294 7,376 4,640 18,550 Ounces sold oz 1,610 6,545 5,565 18,375 Cash cost per ounce sold US$/oz 2,723 1,305 2,442 1,046 All-in sustaining cost per ounce sold US$/oz 2,643 2,069 2,808 1,467 Cash cost per tonne milled US$/t Capital expenditure (100%) US$( 000) (101) 4, ,564 - Sustaining capital US$( 000) 94 3, ,700 - Capitalised development US$( 000) - 1,226-3,605 - Expansionary capital US$( 000) , , ,166 - Non-cash reclamation asset adjustments US$( 000) (195) (597) (161) (602) Operating performance Following the end of mining operations in Q we have continued to progress the clean-up of the mine site ahead of formal commencement of closure activities. During the quarter we completed the stripping of all underground equipment from the mine, progressed the pit clearing, commenced the decommissioning of the process plant and completed the levelling of the ROM pad. Mill throughput resulted from the processing of the materials from the clean-up of the ROM pad which, together with the cleanup of the process plant tanks, led to the recovery of 1,294 ounces. Final clean-up of the plant has started, and we expect that any incidental production from the closing of the mine will be completed during Q We have submitted the Mine Closure Plan to the relevant government departments and remain in discussions with the Tanzanian government, with regards to the ultimate end use of the mine site. As part of the closure process we have impaired US$16.7 million of inventory from the mine, as there is no other reasonable use for these supplies. The carrying value of all assets at Tulawaka is now US$1.1 million and will be recovered from usage over the closure period. African Barrick Gold Half Year Report for the six months ended LSE: ABG

15 Exploration and Development Update As previously announced as part of the Operational Review we have scaled back our exploration and evaluation budget for 2013 to US$21 million, which is a reduction of 54% from US$46 million in The majority of work this year is based around deep drilling at Bulyanhulu and targeted greenfields exploration in both Kenya and at Dett-Ochuna and Tagota in Tanzania. Furthermore, due to the gold price environment we have decided to temporarily defer all expansionary capital projects other than the ongoing construction of the expansion of the CIL Circuit at Bulyanhulu. This measure will help to preserve cash and ensure optionality as we move through and implement the Operational Review. Whilst this means we will not be proceeding immediately with the Upper East Project at Bulyanhulu, we will incorporate the project into the review of the life of mine as part of the Operational Review as we ultimately decide how best to proceed with the future development of our flagship asset. At North Mara the review of the life of mine continues and will be guided by our overall assessment of the availability of the land necessary to implement the plan. The underground potential identified so far at North Mara will be incorporated as appropriate into the scenario planning for the mine. Desktop work will continue at Nyanzaga in order to continue to improve our understanding of the structural controls of the mineralisation and ultimately to see if we can develop the mine with lower upfront capital expenditures. Bulyanhulu CIL Expansion Project The Bulyanhulu CIL Expansion project continues to progress well and is now over 50% complete. The project remains on track for first production in Q and we remain on budget, with US$71.8 million spent to date on the project, of which US$45.7 million was incurred in the first half of The project is funded by a US$142 million debt facility of which US$80 million has been drawn down to date. During the second quarter the focus was on the completion of the earthworks and the commencement of the construction of the leach tanks. The key focus for the coming quarter is to accelerate the civil construction and the fabrication programmes to ensure that critical path items are delivered to the site on time and the plant is commissioned during Q The first phase of construction of the new Tailing Storage Facility, in order to hold the expanded CIL tailings, is expected to commence in Q Exploration Tanzania Dett-Ochuna Project Dett-Ochuna is a large gold system hosted in granitic and sedimentary rocks located approximately 45 kilometres west of North Mara. Historic drilling programmes intersected very wide zones of low grade mineralisation ( g/t gold) extending from surface to depths greater than 300 metres. The current drilling programmes are targeting higher grades zones within this anomalous gold system. Phase 1 follow-up drilling was completed during February 2013 with encouraging results received from discrete higher grade zones (>1.5g/t gold) that justified additional drilling on the project. Previously announced, selected significant results included: 1.15g/t Au from 66m, including 1.85g/t Au from 79m 1.33g/t Au from 88m, including 2.08g/t Au from 124m 1.08g/t Au from 67m, including 1.52g/t Au from 68m 1.44g/t Au from 140m, including 1.67g/t Au from 144m 1.84g/t Au from 181m, including 2.46g/t Au from 198m 1.16g/t Au from 72m, including 1.51g/t Au from 94m 1.00g/t Au from 111m, including 2.21g/t Au from 159m Phase 2 follow-up drilling consists of an additional seven drill holes. At the end of H1 2013, six of the seven holes had been completed for a total of 2,023 metres bringing the H total to 3,407 metres. The aim of this phase of drilling was to investigate controls on the higher grade mineralisation, as well as testing the dip and strike extensions of the >1g/t Au mineralised domains. At the end of June 2013, results for five holes had been received with selected significant results including: DTD g/t Au from 163m, including 2.29g/t Au from 193m 1.05g/t Au from 174m, including 1.45g/t Au from 203m 1.25g/t Au from 244m, including 1.71g/t Au from 244m African Barrick Gold Half Year Report for the six months ended LSE: ABG

16 Figure Dett-Ochuna drill hole location plan with selected significant assays and approximate trend of gold zones In addition to positive drill results for H1 2013, preliminary metallurgical test work was carried out by ALS Ammtec in Perth and returned encouraging results. Two composite samples obtained from purpose drilled HQ diamond core holes, DTDM0021 and DTDM0022, were submitted to ALS Ammtec for gravity / leach test work. All samples were of primary (not oxidised) mineralisation. Leach tests were carried out in bottle with roll agitation, and were carried out on -150, -106, -75 and -53µm (micron) grinds. As expected, the -75µm grind produced optimal results including: Sample #1 returned a calculated head grade of 2.47g/t Au, gravity recovery of 58.2% Au, 24hr NaCN leach of 93.5% Au and tail grade of 0.16g/t Au, and Sample #2 returned a calculated head grade of 1.35g/t Au, gravity recovery 24.9% Au, 24hrs NaCN leach of 88.8% Au and tail grade of 0.16g/t Au. Recovery for Samples 1 and 2 after two hours were 87.4% Au and 81.2% Au respectively, indicating that the bulk of the leachable gold is liberated very quickly. Further test work is ongoing and will include heap leach test work on low grade material. Geology and mineralisation models are currently being interpreted and compiled in order to complete a preliminary global resource estimate and decide on future targeting and drilling. Tagota Project At the Tagota Project, approximately 35km northwest of the Gokona open pit, eight reverse circulation ( RC ) drill holes were completed for 1,078 metres targeting gold mineralisation in basement rocks beneath younger volcanic cover rocks (phonolite). The target is a large circular magnetic feature interpreted to be a 2.5km x 2.5km intrusive complex with artisanal mines around the exposed outer perimeter, and thought to be a similar setting to the Dett-Ochuna gold system. Drilling encountered the anticipated geology, being predominantly an altered felsic-to-intermediate intrusion (syenite) with disseminated sulphides and interpreted stock-work style quartz veining. Results have been received for all eight drill holes with better intersections including: TGRC0006: 1.01g/t Au from 44m, and TGRC0007: 1.08g/t Au from 81m African Barrick Gold Half Year Report for the six months ended LSE: ABG

17 Figure Tagota interpreted geology and drill hole location plan showing location of recent reverse circulation drill holes Given the limited number of holes, the very broad spaced nature of the drilling, and the fact we were targeting beneath metres of phonolite cover these results are very encouraging. We plan to complete several follow-up diamond core holes adjacent to the anomalous RC holes to investigate the geometry and continuity of the gold system to allow for planning of future drill programmes. Kenya West Kenya JV Project Exploration programmes in Kenya during H focused on target generation, mapping, soil sampling and rock chip sampling across selected regional prospects in order to delineate and validate targets for follow up programmes. During the quarter a total of 2,545 soil samples were collected across the Kakamega Dome and Lake Zone gold camps on broad (400 metre and 800 metre) spaced grids, and fourteen gold-in-soil anomalies greater than 1km in strike were identified for infill sampling. Additionally, several preliminary diamond core holes were completed on the Ramula, Bushiangala and Rosterman prospects targeting extensions to known mineralisation and structural controls. At the Ramula Project diamond core drilling during H targeted a gold system consisting of multiple stacked, narrow, shallow-dipping, high-grade quartz veins within an intrusive body (interpreted to be a diorite intrusion/plug) previously identified by diamond core drilling in late The current phase of drilling intersected the interpreted extensions of quartz reefs and modeling of the significant gold zones is currently underway to assess the potential of the Ramula system before further drilling is undertaken. Selected significant results from the drill programme during H included: ANRDD009: 7.34g/t Au from 88m and 89.7g/t Au from 126m ANRDD010: 5.6g/t Au from 125m and 4.03gt/ Au from 221m ANRDD011: 7.96g/t Au from 167m Results for the Bushiangala and Rosterman diamond core holes were awaited at the end of H Aircore drilling to test existing soil anomalies throughout the Kakamega Dome and Lake Zone gold camps is expected to commence in August 2013, with a total of 25,000-32,000 metres planned by the end of the year utilising two drill rigs. The aim of these programmes is to establish camp-scale targets for more advanced stage reverse circulation and diamond core drill testing in African Barrick Gold Half Year Report for the six months ended LSE: ABG