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AFRICAN BARRICK GOLD PLC: 3rd Quarter Results


AFRICAN BARRICK GOLD PLC

26 October 2012

LSE: ABG

Results for the three months ended 30 September 2012 (Unaudited)

Based on IFRS and expressed in US Dollars (US$), reference to A$ is Australian Dollars

African Barrick Gold plc ("ABG'') reports third quarter results

Key Highlights

- Expansion of the Bulyanhulu Upper East Project bringing total project reserves to in excess of 2 million ounces of gold

- Satisfaction of all conditions precedent for the A$20 million acquisition of Aviva Mining (Kenya) Limited

- China National Gold Group Corporation due diligence process ongoing

Financial Highlights

- Revenue of US$265 million, compared to US$354 million in Q3 2011

- Cash margin2 of US$723 per ounce, versus US$1,087 in Q3 2011

- Lower production levels resulted in:

- EBITDA2 of US$83 million

- Net income of US$29 million, with EPS of US7.1 cents

- Operational cash flow of US$55 million

- Net cash position of US$452 million as at 30 September 2012

Operational Highlights

- Attributable gold production1 of 147,786 ounces (Group production1 of 151,018 ounces), in line with Q1 and Q2 2012, but down 19% on Q3 2011

- Cash cost per ounce sold2 of US$965, in line with Q1 and Q2 2012, but above Q3 2011 of US$687

- Increased grade profile and production at North Mara

- Successful completion of the scoping study at Nyanzaga, pre-feasibility study now underway

- Continued exploration success, particularly at key projects at Bulyanhulu and North Mara

Commenting on the results, CEO Greg Hawkins said:"This has been a challenging quarter for ABG. We were expecting to see a step up in production levels, leading into the end of the year and 2013, but there have been production interruptions and issues across each of our sites. We have seen the ramp up in grade at North Mara which is positive and expected to continue in Q4, but have been disrupted in our efforts to mine it at a normal rate given an increase in illegal mining operations. At the same time the production levels at Bulyanhulu and Buzwagi have been lower than planned. In light of this, we now believe that our full year production will be around 5-10% below the bottom of our previous range of 675,000 - 725,000 ounces of gold, at a total cash cost of US$900-950 per ounce. Our focus over the last quarter of 2012 and into 2013 is on building on the grade profile at North Mara, improving stope availability at Bulyanhulu and plant throughput at Buzwagi as well as minimising the ongoing operational disruption that has resulted from the offer period we are currently in. Looking to the longer term, we continue to focus on leveraging Bulyanhulu, as evidenced by the recent announcement with respect to Bulyanhulu Upper East. Similarly our acquisition of a large exploration package in Kenya represents an important first step in expanding the business more broadly in Africa."

Three months ended Nine months ended African Barrick Gold plc 30 September 30 September


                                                                                
            
                                                               %                
        %   

2012 2011 change 2012 2011 change

(Unaudited)


            
                                                                                

Attributable Gold Production (ounces)1 147,786 182,401 -19% 445,528 528,258 -16%

Attributable Gold Sold (ounces)1 147,026 183,588 -20% 449,667 540,670 -17%

Cash cost per ounce sold (US$/ounce)2 965 687 40% 946 666 42%

Average realised gold price (US$/ounce)2 1,688 1,774 -5% 1,657 1,567 6%

(in US$'000)


            
                                                                                

Revenue 264,927 354,330 -25% 799,395 932,717 -14%

EBITDA2 83,434 184,252 -55% 254,373 429,179 -41%

Cash generated from operating activities 54,955 152,568 -64% 165,264 338,702 -51%

Net profit attributable to owners 29,013 102,080 -72% 94,167 222,213 -58%

Basic earnings per share (EPS) (cents) 7.1 24.9 -72% 23.0 54.2 -58%

Operating cash flow per share (cents)2 13.4 37.1 -64% 40.3 82.5 -51%


                                                                                
            
                                                                                
            
                                                                                
            

1 Group production and sold ounces consolidate 100% of Tulawaka's production
base. Attributable production and sold ounces reflect equity ounces which
exclude 30% of Tulawaka's production and sales base.

2 Cash costs per ounce sold, average realised gold price, EBITDA, operating
cash flow per share and cash margin are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to "Non-IFRS measures" on page 15
for the definition of each measure.
    
    Conference call

A conference call will be held for analysts and investors on Friday 26 October 2012 at 9:00am UK time.

Participant Dial In: +44 (0) 203 003 2666 / +1 866 966 5335

Please quote 'ABG' when prompted by the operator

There will be a replay facility available for seven days thereafter, with access details as follows:


    Dial in:                            +44 (0) 208 196 1998

Access PIN:                         2826842#
    

For further information, please visit our website: www.africanbarrickgold.com or contact:

African Barrick Gold plc +44 (0)207 129 7150

Andrew Wray, Head of Corporate Development & Investor Relations

Giles Blackham, Investor Relations Manager

RLM Finsbury +44 (0)207 251 3801

Charles Chichester

About ABG

ABG is Tanzania's largest gold producer and one of the five largest gold producers in Africa. We have four producing mines, all located in northwest Tanzania, and several exploration projects at various stages of development. ABG has a high-quality asset base, solid growth opportunities and a clear strategy for growth.

The key pillars to our strategy are:

driving operating efficiencies to optimise production from our existing asset base;

growing through near mine expansion and development of advanced-stage projects; and

organic greenfield growth and acquisitions in Africa.

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 (Barrick), our majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report.

FORWARD- LOOKING STATEMENTS

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 regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expects," "anticipates," "believes," "intends," "estimates" 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 statementscontained 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 or national or local legislation in countries in which ABG conducts or may in the future conduct business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices, changes in 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, risk of trespass, theft and vandalism, changes in its business strategy,as well as risks and hazards associated with the business of mineral exploration, development, mining and production. 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, future events 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.

Key Statistics


    African Barrick Gold plc                     Three months        Nine months  
                                                 ended              ended     
                                             30 September       30 September  

(Unaudited) 2012 2011 2012 2011

Operating results

Tonnes mined (thousands of tonnes) 12,992 11,847 34,359 34,507

Ore tonnes mined (thousands of tonnes) 1,514 2,133 4,804 5,355

Ore tonnes processed (thousands of tonnes) 1,890 2,068 5,632 5,681

Process recovery rate (percent) 89.5% 87.7% 87.6% 87.9%

Head grade (grams per tonne) 2.7 3.1 2.8 3.3

Attributable gold production (ounces)1 147,786 182,401 445,528 528,258

Attributable gold sold (ounces)1 147,026 183,588 449,667 540,670

Copper production (thousands of pounds) 2,483 4,177 8,609 11,986

Copper sold (thousands of pounds) 2,325 3,964 8,284 11,846

Cash cost per tonne milled (US$)2 75 61 76 63

Per ounce data (US$/ounce)


                                                                              
     Average spot gold price3                1,652     1,702     1,652   1,534
                                                                              
     Average realised gold price2            1,688     1,774     1,657   1,567
                                                                              
     Cash cost2                                965       687       946     666
                                                                              
     Amortisation and other cost2              268       178       238     174
                                                                              
     Total production cost2                  1,233       865     1,184     840

Cash margin2 723 1,087 711 901

Average realised copper price (US$/lb) 3.88 3.68 3.63 4.01


                                                                              
    

Three months ended Nine months ended

30 September 30 September

(Unaudited)


        
                                                                                

Financial results 2012 2011 2012


    2011
                                                                                

(in US$'000)


        
                                                                                
        
                                                                                
        
                                                                                

Revenue 264,927 354,330 799,395 932,717

Cost of sales (197,930) (182,020) (584,911) (526,659)

Gross profit 66,997 172,310 214,484 406,058

Corporate administration (13,586) (13,905) (39,195) (34,430)

Exploration and evaluation costs (7,314) (6,871) (17,698) (22,950)

Corporate social responsibility expenses5 (2,963) (3,884) (9,713) (5,257)

Other charges5 (418) 2,947 (4,693) (11,252)

Profit before net finance expense and taxation 42,716 150,597 143,185 332,169

Finance income 595 361 1,674

1,171

Finance expense (2,120) (2,195) (6,809) (6,317)

Profit before taxation 41,191 148,763 138,050 327,023

Tax expense (12,545) (43,298) (43,880) (97,329)

Net profit for the period 28,646 105,465 94,170 229,694

Profit/(loss) attributable to:


        
                                                                                

- Non-controlling interests (367) 3,385 3

7,481

- Owners of the parent 29,013 102,080 94,167 222,213


                                                                                
        
    
    

Three months ended Nine months ended

30 September 30 September

(Unaudited)

Other Financial information

(in US$'000 except per share figures) 2012 2011 2012 2011

Cash and cash equivalents 452,447 525,287 452,447 525,287

Cash generated from operating activities 54,955 152,568 165,264 338,702

Capital expenditure4 91,783 109,508 216,689 228,174

EBITDA2 83,434 184,252 254,373 429,179

Basic earnings per share (cents) 7.1 24.9 23.0 54.2

Operating cash flow per share (cents)2 13.4 37.1 40.3 82.5

Equity 2,820,403 2,743,005 2,820,403 2,743,005

1 Production and sold ounces reflect equity ounces which exclude 30% of Tulawaka's production and sales base.

2 Cash cost per tonne milled, average realised gold price, cash cost per ounce sold, amortisation and other costs per ounce sold, total production cost per ounce sold, EBITDA, operating cash flow per share and cash margin are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to "Non-IFRS measures"' on page 15 for definitions.

3 Reflects the London PM fix price.

4 Includes non-cash rehabilitation asset adjustments and finance lease purchases during the period.

5 Restated to separately disclose corporate social responsibility expenses on the face of the income statement.


    Developments
    Acquisition of Aviva Mining (Kenya) Limited ("AMKL")

As announced on 22 October 2012, we have now satisfied all conditions precedent for the A$20 million acquisition of AMKL and are seeking to close the transaction shortly. We will now continue with systematic exploration programmes throughout the licence areas, consisting of more than 2,800km2, testing for new gold targets and are aiming to advance one or more projects to resource category level during 2013.

Discussions with China National Gold Group Corporation ("CNG")

On 16 August 2012 it was disclosed that CNG was in preliminary discussions with Barrick Gold Corporation regarding the potential purchase of its stake in ABG. Should CNG acquire more than 30% of the voting interest in ABG, it would then be required to make an offer for the whole of ABG's issued ordinary share capital.

Following this, on 4 September 2012, ABG announced the formation of a Transaction Committee made up of three independent non-executive directors (Michael Kenyon, Derek Pannell and David Hodgson) and appointed J.P. Morgan Cazenove and RBC Capital Markets as financial advisers. Since that point, a due diligence process, including site visits and management presentations, has been ongoing and has involved a range of ABG management and employees. We have appointed financial and legal advisors to assist us in this process and help minimise the disruption to our day to day activities. At this point there can be no certainty that any transaction will be forthcoming. We will provide further updates as and when it is appropriate.

Operating and financial review for the three months ended 30 September 2012

Attributable gold production for the quarter totalled 147,786 ounces, a 19% decrease compared to the corresponding quarter in 2011. Production increased at North Mara by 17% but this was more than offset by the impact of lower mined grades at Buzwagi, stope and mobile equipment availability issues at Bulyanhulu and batch milling at Tulawaka.

At Bulyanhulu, mining performance was impacted by reduced stope availability, lower availability of underground mobile equipment and paste filling delays which resulted in lower ore tonnes hoisted. Mill throughput was 9% lower than Q3 2011, as a result of the lower mining activity in the quarter, leading to lower production.

Buzwagi saw a marked improvement in equipment availability, which led to tonnes mined being 53% higher than in Q3 2011 and a 22% improvement over the previous quarter. The planned focus on the waste stripping programme has resulted in mining of lower grade areas of the pit and therefore a decrease in the head grade delivered to the plant. It is anticipated that this will enable higher grade zones to be accessed later this year and into 2013. Throughput levels were lower than expected due to unplanned mill maintenance.

At North Mara, gold production for the quarter increased by 17% from Q3 2011 due to the increased head grade driven by improved access to higher grade zones in the Gokona pit and higher plant recoveries as a result of the improvements stemming from the completion of the gold plant recovery project.

At Tulawaka, there was an increased focus on underground development work aimed at extending the mine life. As a result, there was a 30% decline in ore tonnes mined compared to Q3 2011. Together with the lack of surface stockpiles, this led to continued batch processing of the underground material blended with mineralised waste.

At a group level, gold sales were in line with production, and 20% lower than Q3 2011 due to the decrease in production.

Tonnes mined for the quarter were 13.0 million compared to 11.8 million in the corresponding quarter of 2011. The increase was driven by Buzwagi due to the improved equipment availability and was partially offset by lower tonnes from North Mara and, to a lesser extent, from Bulyanhulu due to equipment availability.

Tonnes processed of 1.9 million were 9% lower than the prior year period as a result of lower ore mining activity at all sites, lower throughput at North Mara and Buzwagi due to plant downtime and batch processing at Tulawaka. Recoveries were slightly higher at 90%, driven by increased recoveries at North Mara.

Copper production for the quarter of 2.5 million pounds was 41% lower than the corresponding quarter of 2011 as a result of the lower overall production at Buzwagi and Bulyanhulu, coupled with lower copper recoveries at Bulyanhulu.

Cash costs for the quarter were US$965 per ounce sold, compared to US$687 per ounce in the corresponding period of 2011.

The increase was primarily due to the following:

lower production base resultant and lower co-product revenue (approximately US$200 per ounce);

the milling of higher cost ore from inventory stockpiles mainly at North Mara (approximately US$130 per ounce) driven by mill throughput being in excess of mining tonnes; and

increased usage and cost of energy, increased maintenance costs and consumables usage (approximately US$75 per ounce).

This was in part offset by an increase in capitalised waste stripping at North Mara and Buzwagi of approximately US$155 per ounce.

As production volumes increase in the fourth quarter, we would expect to see a reduction in our cash costs as the volume impact reverses.

Our financial performance over the third quarter reflected lower production levels compared to the corresponding period in 2011, together with a US$86 per ounce lower average realised gold price compared to Q3 2011. Notwithstanding the lower production levels, we generated EBITDA of US$83 million and EPS of US7.1 cents. Capital expenditure for the quarter was US$91.8 million compared to US$109.5 million in Q3 2011 and we ended the period with US$452 million in cash on the balance sheet.

In light of this, we now believe that our full year production will be around 5-10% below the bottom of our previous range of 675,000 - 725,000 ounces of gold, at a total cash cost of US$900-950 per ounce.

Bulyanhulu

Key statistics

Three months Nine months

ended ended Bulyanhulu 30 September 30 September

(Unaudited) 2012 2011 2012 2011

Underground ore tonnes hoisted Kt 240 257 746 795

Ore milled Kt 250 276 782 815

Head grade g/t 7.8 7.7 8.3 8.3

Mill recovery % 90.6% 91.1% 90.7% 91.1%

Ounces produced oz 56,913 62,064 188,499 197,601

Ounces sold oz 55,687 63,044 189,104 204,849

Cash cost per ounce sold US$/oz 910 617 762 590

Cash cost per tonne milled US$/t 202 141 184 148

Copper production Klbs 1,415 1,833 4,897 6,058

Copper sold Klbs 1,349 1,789 4,602 5,930

Capital expenditure US$(000) 26,924 30,898 67,163 65,667

Operating performance

Gold production for the quarter at Bulyanhulu was 56,913 ounces, 8% lower than the prior year as a result of lower milling activity. Gold ounces sold for the quarter were 55,687 ounces, marginally lower than production.

Due to shaft capacity constraints, Bulyanhulu holds limited surface stockpiles and as a result, delays in ore delivery translate directly into milling activity. During the quarter we experienced lower availabilities of underground mobile equipment due to increased maintenance requirements, which together with paste fill delays and lower than plan availability of high grade stopes, led to lower ore tonnes hoisted.

The head grade for the quarter was 7.8 grams per tonne, up on the prior year, but lower than plan as a result of lower availability of high grade stopes together with increased dilution. We have subsequently made improvements to our dilution monitoring systems and supervisory processes which should lead to a reversion to normalised levels going forward.

The upgrading of our diesel back up power capacity at the mine is currently being commissioned and is expected to be operational by the middle of the fourth quarter.

Copper production for the quarter of 1.4 million pounds was 23% lower than that of the comparable period in 2011. This was mainly due to the mining of areas with lower copper grades and lower recoveries.

Cash costs for the quarter of US$910 per ounce sold were 47% higher than the prior year period of US$617. This increase is primarily due to the lower production base and resultant lower co-product revenue, increased maintenance costs due to increased underground breakdowns and actions taken to address underground equipment availability rates, increased cost and usage of energy and higher contracted services costs due to rate increases from major contractors, partially offset by higher underground capitalised development.

Cash cost per tonne milled increased to US$202 in Q3 2012 (US$141 in Q3 2011) as a result of both the cost increases outlined above and lower throughput.

Capital expenditure for the quarter of US$26.9 million was 13% lower than the prior year of US$30.9 million. The key areas of capital investment include:

capitalised development: capitalised underground development expenditure (US$11.2 million);

expansionary capital: CIL and process plant expansion (US$1.8 million), Upper East expansion (US$2.1m) and capitalised exploration drilling (US$0.9 million); and

sustaining capital: continuous improvement projects (US$3.5 million), mining equipment (US$1.8 million), plant improvements (US$2.0 million), non-cash rehabilitation adjustments (US$1.0 million) and other sustaining capital expenditure (US$2.6 million).

Buzwagi

Key statistics

Three months ended Nine months ended Buzwagi 30 September 30 September

(Unaudited) 2012 2011 2012 2011

Tonnes mined Kt 8,664 5,657 20,655 15,329

Ore tonnes mined Kt 800 1,071 2,908 2,748

Ore milled Kt 888 927 2,653 2,350

Head grade g/t 1.2 2.3 1.4 2.4

Mill recovery % 88.3% 88.3% 85.2% 88.1%

Ounces produced oz 30,211 60,699 100,942 158,625

Ounces sold oz 32,809 60,939 104,058 161,972

Cash cost per ounce sold US$/oz 1,269 696 1,189 649

Cash cost per tonne milled US$/t 47 46 47 45

Copper production Klbs 1,069 2,343 3,713 5,928

Copper sold Klbs 976 2,175 3,683 5,916

Capital expenditure US$(000) 33,337 34,529 65,822 55,429

Operating performance

Buzwagi continued to focus on the significant waste stripping programme in order to access higher grade material in the fourth quarter and into 2013. As a result of a marked improvement in the equipment availability, the increase in the hauling capacity and improved contract performance, tonnes mined of 8.7 million were 53% higher than in Q3 2011 and 22% better than Q2 2012.

The focus on the waste stripping programme has resulted in the mining of lower grade areas of the pit and therefore a decrease in the head grade delivered to the plant, which drove gold production of 30,211 ounces, 50% lower than 60,699 ounces in Q3 2011. Mill throughput was broadly in line with the prior year, but was below plan due to the impact of milling related maintenance as both the ball mill and the SAG mill were re-lined during the quarter. Gold ounces sold of 32,809 were marginally ahead of production.

Copper production for the quarter of 1.1 million pounds was 54% below the prior year production of 2.3 million pounds. This was mainly due to the mining of lower grade material and lower throughput.

As a result of the 48% reduction in grade driving the lower production base, the cash cost per ounce sold for the quarter increased to US$1,269 compared to US$696 in Q3 2011. Cash costs per tonne milled remained in line with the prior year period at US$47. Key impacts on the cash cost were the increased usage and cost of energy, increased contracted services and consumable costs, which on a per ounce basis were partially offset by the increased capitalisation of deferred stripping expenditure and a reduction in sales related costs due to the reduction in gold revenue.

Capital expenditure for the quarter was US$33.3 million compared to US$34.5 million in Q3 2011. Capital investment during the quarter consisted mainly of:

(i) capitalised development: capitalised deferred stripping expenditure (US$17.6

million); and

(ii) sustaining capital: US$14.0 million relating to plant improvements and mining

equipment of which US$4.5 million related to the order of additional mining


     fleet, non-cash rehabilitation adjustments (US$1.0 million) and other
     sustaining capital expenditure (US$0.7 million).
     

North Mara
    Key statistics

Three months ended Nine months ended North Mara 30 September 30 September

(Unaudited) 2012 2011 2012 2011

Tonnes mined Kt 4,057 5,826 12,603 18,216

Ore tonnes mined Kt 443 757 1,016 1,705

Waste tonnes mined Kt 3,614 5,069 11,587 16,511

Ore milled Kt 709 797 2,046 2,297

Head grade g/t 2.6 2.2 2.4 2.2

Mill recovery % 88.3% 80.6% 83.9% 81.1%

Ounces produced oz 53,120 45,526 129,996 129,128

Ounces sold oz 50,200 44,975 129,800 130,625

Cash cost per ounce sold US$/oz 770 753 984 793

Cash cost per tonne milled US$/t 55 43 62 45

Capital expenditure US$(000) 21,446 33,171 56,647 85,314

* The year to date declared ore tonnes mined includes a negative adjustment of approximately 306,000 tonnes

Operating performance

At North Mara, gold production for the quarter increased to 53,120 ounces, up 17% from 45,526 in Q3 2011, and 28% higher than the previous quarter. This was due to the increased head grade driven by mine sequencing and improved plant recoveries as a result of the improvements stemming from the completion of the gold plant recovery project. Gold sold of 50,200 ounces was 12% higher than 2011 due to the increased gold production.

Whilst we were able to begin to access higher grade material in the Gokona pit as planned, total tonnes mined remained behind plan. Mining has been negatively affected by lower than planned availability of excavators due to delays in getting spare parts to site and lower haul truck availability as a result of increased maintenance requirements due to the age of the fleet. We have also seen an increase in intrusions onto the mine site which has led to reduced mining rates, and required additional rehandling of material. In addition, there was no waste stripping during the quarter in the Nyabirama pit due to delays in land acquisitions and relocation.

As we go through the fourth quarter, we expect to have increased access to higher grade ore tonnes which should bring further improvements to the head grade and to the ounce profile during the quarter.

Cash costs for the quarter were US$770 per ounce sold, broadly in line with the prior year period. Direct mining costs were significantly below the prior year as a result of the lower contracted services costs due to a move away from contract maintenance and an increase in capitalised stripping costs due to the ongoing waste stripping programme. This was more than offset by the absorption of higher cost ore stockpiles as mill throughput exceeded tonnes mined by 60%, together with the increased sales related costs.

Cash cost per tonne milled increased to US$55 in 2012 from US$43 in Q3 2011, mainly as a result of the increased cost profile outlined above and lower throughput.

Following a detailed review of the declared ore mined at North Mara in August, it was found that ore tonnes rehandled from the stockpile were incorrectly included in the previously reported ore tonnes mined. This resulted in a reduction of ore tonnes mined of approximately 306,000 tonnes on a year-to-date basis.

Capital expenditure for the quarter totalled US$21.4 million compared to US$33.2 million in the prior year. Key capital expenditure included:

(i) capitalised development: capitalised waste stripping (US$11.6 million); and

(ii) sustaining capital: process plant improvements (US$3.1 million), mine equipment

(US$2.4 million), investment in mine infrastructure (US$1.7 million), the water


     treatment plant (US$1.2 million) and other capital items (US$1.4 million).

The joint water sampling exercise with NEMC, the Tanzanian environmental
regulator, and an independent third party, to test the quality of the output
from the water treatment plant at North Mara continued through the period. Once
successfully completed, the environmental protection order should be lifted,
which would allow North Mara to discharge water from the mine site. We aim to
complete this exercise in the fourth quarter of 2012.



Tulawaka

 
Key statistics
                                            Three months                     

ended Nine months ended Tulawaka (reflected as 70%) 30 September 30 September

(Unaudited) 2012 2011 2012 2011

Underground ore tonnes hoisted Kt 32 46 91 106

Open pit ore tonnes mined Kt - 2 43 2

Open pit waste tonnes mined Kt - 59 222 59

Ore milled Kt 43 68 151 218

Head grade g/t 5.7 6.8 5.6 6.4

Mill recovery % 95.8% 96.0% 95.7% 94.9%

Ounces produced oz 7,541 14,112 26,091 42,904

Ounces sold oz 8,330 14,630 26,705 43,225

Cash cost per ounce sold US$/oz 1,309 749 1,128 707

Cash cost per tonne milled US$/t 254 162 200 140

Capital expenditure (100%) US$(000) 7,638 8,111 17,202 17,390


                                                                          
    Operating performance

The focus during the quarter at Tulawaka was on increasing underground development rates and as a result, lower ore tonnes were mined and a higher proportion of ore tonnes were sourced from lower grade development stopes.

The batch milling campaign continued in the quarter resulting in a 37% decrease in throughput compared to Q3 2011. In order to maximise efficiencies in the process plant, ore tonnes mined were blended with mineralised waste for processing, which led to a 16% reduction in head grade against the prior year and together with the lower throughput led to attributable gold production for the quarter of 7,541 ounces compared to the 14,112 ounces produced in Q3 2011. Gold ounces sold were 10% higher than production.

Cash costs for the quarter were US$1,309 per ounce sold compared to US$749 in the prior year period. This was mainly due to costs being spread over the lower production base and increased consumables usage driven by drilling supplies, explosives and ground support material used in the underground development.

Cash costs per tonne milled increased to US$254 in the quarter from US$162 in Q3 2011, primarily as a result of the cost increases detailed above and lower throughput.

Our exploration drilling programmes have progressed during the year and we continue to target an extension to the mine life beyond the middle of 2013. Work is currently ongoing to construct a second underground portal, which will provide increased access for mining and future drill platforms.

Capital expenditure for the quarter totalled US$7.6 million compared to US$8.1 million for the previous year. Key capital expenditure items included:

(i) capitalised development: capitalised underground development (US$1.8 million);

(ii) expansion capital: capitalised exploration drilling (US$1.1 million); and

(iii) sustaining capital: capital invested to support the mine life extension (US$4.7

million).

Exploration and Development Update

Tanzania

Bulyanhulu

As part of our drive to optimise our assets, one of our key aims for this year has been the progression of the expansion of Bulyanhulu in order to increase mining rates to bring production more into line with the scale of the resource base. In May we received Board approval for the CIL expansion, and have now successfully expanded the scope of the Upper East Project whilst maintaining our planned timeline for first production in Q4 2014. With the two expansion projects, we now have a clear path to increasing production levels at Bulyanhulu towards 400,000 ounces per annum over the coming years.

Bulyanhulu Carbon in Leach ("CIL") Circuit Expansion

During the quarter preparation work has continued on the CIL expansion as negotiations over the EPC contract continue. Detailed design is now 75 percent complete and early site works have started with the construction of the camp and facilities for the construction crew. Orders have been placed for certain long lead items, including the oxygen plant. We are also progressing the potential export credit financing of the project and aim to provide a further update in the coming months.


    Bulyanhulu Upper East

We continue to make good progress with respect to the acceleration of mining of
the Upper East Zone at Bulyanhulu and recently announced that we have received
Board approval to begin the ordering of certain long lead mining equipment for
the project. The project was previously solely based on the 1.2 million ounces
(Moz) of reserves located in Reef-1 of the Upper East Zone, and we have now
completed a positive scoping study to incorporate the 900 thousand ounces of
gold (Koz) which currently sit in reserves in Reef-2 of the Upper East zone. 
We are now progressing with pre-feasibility and feasibility work on Reef-2 with
the aim of completing a combined feasibility study for both reefs by the end of
Q1 2013.

Production from the Upper East Zone is targeted to commence in late 2014 and is
expected to average in excess of 90Koz per annum over the life of mine ("LOM")
at average cash costs of US$608 per ounce. The incorporation of Reef-2
significantly enhances the project economics, driving a post tax IRR of 34% at
a gold price of US$1,700 per ounce. The project is estimated to require
approximately US$100 million of pre-production capital, to be spent in 2013 and
2014 and is planned to deliver LOM production of 1.86Moz over the next 20
years.

In addition, the near-surface drill programme on Upper East Reef-2 was expanded
to better delineate reserves and resources (between 150 metres and 600 metres
below surface) and to help with the feasibility study work investigating the
potential of accessing Reef-2 Upper East ore at the same time as Reef-1.  At
quarter end assays had been received for 5 holes of the 24 holes drilled during
the quarter with results being positive, and in line with expectations, with
selected results including:
      - BGMRCDD0020: 1.00m @ 9.63 g/t Au from 389m
    - BGMRCDD0021: 1.68m @ 9.47g/t Au from 329.69m
    - BGMRCDD0037: 5.96m @ 10.4g/t Au from 458.06m
    Bulyanhulu South - RC Target

The RC Target lies on the Bulyanhulu South property, approximately 5km due south of the Bulyanhulu plant. Drilling undertaken during the quarter targeted a 1.2km gold-in-soil anomaly (>25 parts per billion gold) and anomalous gold intersected in shallow scout drilling. An initial programme of three core holes all returned positive assays, with the stand-out hole being BURCDD0243, which intersected 10m @ 9.8g/t Au from 118 metres, including 6m @ 15g/t Au, within a sheared and altered granodiorite intrusion co-incident with the soil anomaly. The down dip extension of the mineralised zone was intersected in drill-hole BURCDD0244 which returned 1m @ 14.3g/t Au from 189 metres. A second, more extensive phase of drilling will commence during Q4 2012 to test the strike extent of the gold-in-soil anomaly in order to assess the size potential of this target.

Nyanzaga Project

We have successfully completed the scoping study at Nyanzaga and have now moved into the pre-feasibility stage where we will examine different options for developing the in-pit resource of in excess of 4.6Moz of gold, consisting of 3.75Moz at 1.42g/t Au Indicated and 0.85Moz at 1.81g/t Au Inferred. In order to ensure an appropriate mix of upfront capital and future cash flows we will examine a range of options for the size of the process plant up to a capacity of 8 million tonnes per annum. The pre-feasibility study is on track to be completed in Q1 2013 and if it continues to show appropriate financial returns the project will then be progressed into a full feasibility study.

In addition, the current phase of deep exploration drilling was completed on the Tusker zone and we continue to receive encouraging assay results from the deep drilling indicating the future potential to delineate underground resources. A limited number of assays were received during the quarter with the best intersection received to date in hole NYZRCDD0053 that returned 16m at 6.34g/t Au from 809m showing the mineralised system remains open below 700 metres vertical.

We believe potential exists around Nyanzaga for further gold mineralisation and have commenced our first exploration drilling following up on IP and electro magnetic surveys with initial drilling showing promising results.


    North Mara
    Gokona

We have continued to progress the feasibility study into the underground potential at Gokona and are incorporating the drilling results received to date into the study. We expect to complete the study by the end of 2012 and will be able to provide a further update following this.

In addition, infill drilling has continued to return positive assay results showing good continuity of mineralised zones encountered in broader spaced drilling. Several wide zones of high-grade gold mineralisation were also returned, and the system remains open at depth. As a result of the continued positive results, the current resource drill programme will be extended in 2013, to target further resource additions.

Selected significant assay results received for the quarter include:

- GKD340: 11m at 8.20g/t Au from 211m (including 3m at 25.5g/t Au), 20m at 4.20g

/t Au from 279m (including 4m at 11.6g/t Au) and 7m at 4.01g/t Au from 361m

- GKD379: 3m @ 5.42g/t Au from 353m, 2m @ 5.01g/t Au from 434m, 2m @ 5.78g/t Au


    from 84m, 2m @ 9.50g/t Au from 606m, and 2m @ 20.5g/t Au from 609m

  - GKD384: 2m @ 26.3g/t Au from 264m
    Nyabirama

The current phase of the Nyabirama drill programme was completed during the quarter having been extended due to the positive results received to date. The results from the drill programme will now be incorporated into the scoping study examining the underground potential beneath the Nyabirama pit. We expect to complete the scoping study by the end of the year, at which point a decsision will be made on whether to progress it into a full feasibility study. Assay results received during the quarter continued to confirm the current resource interpretation, intersecting multiple narrow high grade zones in each hole.


    Selected significant assay results during the quarter include:
     - NBD095: 2m @ 24.5g/t Au from 16m and 3m @ 5.29g/t Au from 164m
    - NBD099: 8m @ 3.86g/t Au from 233m and 7m @ 12.7g/t Au from 253m

- NBD104: 2m @ 7.31g/t Au from 253m, 2m@ 5.69g/t Au from 262m, 14m@ 4.41g/t Au

from 298m, and 2m@ 9.42g/t Au from 328m

- NBD108: 2m @ 5.59g/t Au from 356m, 2m @ 23.8g/t Au from 359m, 3m @ 5.24g/t Au


    from 443m, 2m @ 14.1g/t Au from 449m and 4m @ 5.65g/t Au from 458m
    Tulawaka
    Eastern Underground Extensions 

We continue to examine the potential extension of the mine life at Tulawaka
beyond the middle of 2013. As a part of this, we have progressed the
development of the second access portal during the quarter with development
drift from the underground toward the portal now close to completion. This
portal will allow us to increase mining activity and also provide further
platforms for exploration drilling.

Kenya

West Kenya Project

As announced on 22 October 2012, we have now satisfied all conditions precedent for the A$20 million acquisition of AMKL and are seeking to close the transaction shortly.

In addition to the results already released on the targets around the Kakamega Dome, recent work has also focused on the Ramula prospect in the Lake Zone Camp. Three core holes have recently been completed to test a prominent magnetic high that is co-incident with a gold in soil anomaly and historic colonial workings, and which is interpreted to be associated with multiple-phase intrusions. Hole ANRDD003 returned the best results to date from broad zones of anomalous gold and altered granodiorite, with visible gold observed in multiple shallow-dipping and stacked quartz veins cutting the intrusion(s). Better results included:

- 23.88m @ 2.64g/t Au from 44m

- 6.4m @ 6.90g/t Au from 172m

- 6.0m @ 5.00g/t Au from 203m

- 4.08m @ 10.4g/t Au from 251m

We are extremely encouraged by these initial results and plan to complete follow-up core holes along strike, and then target the system at greater depth on mobilisation of a rig capable of drilling deeper holes beyond 250 metres.


    

Figure 1:  Section 1012E (looking west) showing recent drill intercepts at
Ramula
    For Section please refer to www.africanbarrickgold.com
    Non-IFRS Measures

ABG has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing ABG's financial condition and operating results. These measures are not in accordance with, or a substitute for, IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures are explained further below.

Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue:

- Unrealised gains and losses on non-hedge derivative contracts

- Unrealised mark to market gains and losses on provisional pricing from copper


    and gold sales contracts; and

  - Export duties.

Cash costs per ounce sold is a non-IFRS financial measure. Cash costs include
all costs absorbed into inventory, as well as royalties, by-product credits,
and production taxes, and exclude capitalised production stripping costs,
inventory purchase accounting adjustments, unrealised gains/losses from
non-hedge currency and commodity contracts, depreciation and amortisation and
social development costs. Cash cost is calculated net of co-product revenue.

The presentation of these statistics in this manner allows ABG to monitor and
manage those factors that impact production costs on a monthly basis. ABG
calculates cash costs based on its equity interest in production from its
mines. Cash costs per ounce sold are calculated by dividing the aggregate of
these costs by gold ounces sold. Cash costs and cash costs per ounce sold are
calculated on a consistent basis for the periods presented.

EBITDA is a non-IFRS financial measure. ABG calculates EBITDA as net profit or
loss for the period excluding:

  - Income tax expense;

  - Finance expense;

  - Finance income;

  - Depreciation and amortisation; and

  - Goodwill impairment charges.

EBITDA is intended to provide additional information to investors and analysts.
It does not have any standardised meaning prescribed by IFRS and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS. EBITDA excludes the impact of cash costs of financing
activities and taxes, and the effects of changes in operating working capital
balances, and therefore is not necessarily indicative of operating profit or
cash flow from operations as determined under IFRS. Other companies may
calculate EBITDA differently.

EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for
depreciation and amortisation and goodwill impairment charges.

Amortisation and other cost per ounce sold is a non-IFRS financial measure.
Amortisation and other costs include amortisation and depreciation expenses and
the inventory purchase accounting adjustments at ABG's producing mines. ABG
calculates amortisation and other costs based on its equity interest in
production from its mines. Amortisation and other costs per ounce sold is
calculated by dividing the aggregate of these costs by ounces of gold sold.
Amortisation and other cost per ounce sold are calculated on a consistent basis
for the periods presented.

Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include
all costs absorbed into inventory, as well as royalties, by-product credits,
and production taxes, and exclude capitalised production stripping costs,
inventory purchase accounting adjustments, unrealised gains/losses from
non-hedge currency and commodity contracts, depreciation and amortisation and
social development costs. Cash cost is calculated net of co-product revenue.
ABG calculates cash costs based on its equity interest in production from its
mines. Cash costs per tonne milled are calculated by dividing the aggregate of
these costs by total tonnes milled.

Cash margin is a non-IFRS financial measure. The cash cost margin is the
average realised gold price per ounce less the cash cost per ounce sold.

Operating cash flow per share is a non-IFRS financial measure and is calculated
by dividing net cash generated by operating activities by the weighted average
number of Ordinary Shares in issue.
    Mining statistical information

The following describes certain line items used in the ABG Group's discussion of key performance indicators:

- Open pit material mined - measures in tonnes the total amount of open pit ore

and waste mined.

- Underground ore tonnes hoisted - measures in tonnes the total amount of

underground ore mined and hoisted.

- Total tonnes mined includes open pit material plus underground ore tonnes

hoisted.

- Strip ratio - measures the ratio waste to ore for open pit material mined.

- Ore milled - measures in tonnes the amount of ore material processed through

the mill.

- Head grade - measures the metal content of mined ore going into a mill for

processing.

- Milled recovery - measures the proportion of valuable metal physically

recovered in the processing of ore. It is generally stated as a percentage of

the metal recovered compared to the total metal originally present.

- Total production costs - measures the total cost of production and is an

aggregate of total cash costs as well as production specific depreciation and

amortisation.

END

-0- Oct/26/2012 06:00 GMT

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