ACA.L Regulatory News (ACA)

AFRICAN BARRICK GOLD 23 October 2014 Results for the three months ended 30 September 2014 (Unaudited) Based on IFRS and expressed in US Dollars (US$) African Barrick Gold plc ("ABG'') reports third quarter results "We are pleased to announce production of 190,986 ounces in the quarter, up 16%on Q3 2013, providing further evidence that the changes we are implementing atour operations continue to improve performance", said Brad Gordon, CEO ofAfrican Barrick Gold. "As a result we have delivered our eighth successivequarterly reduction in all-in sustaining costs (AISC). During the quarter wegenerated US$17 million in net cash flow and have now increased our cashbalance year to date, after returning US$14 million in dividends to ourshareholders and continuing to invest in growth. The optimisation of our assetscontinues with good progress made during the quarter on the projects at bothBulyanhulu and North Mara and we are looking forward to setting out our longerterm plan for the business at our Investor Day on 27 November." Operational Highlights Gold production of 190,986 ounces, up 16% on Q3 2013 Gold sales of 178,490 ounces, 11% higher than Q3 2013 AISC1,2 of US$1,098 per ounce sold, 14% lower than Q3 2013 and 1% lower than Q22014 Cash costs1,2 of US$679 per ounce sold, 7% lower than both Q3 2013 and Q2 2014 Bulyanhulu CIL Expansion produced 5,097 ounces, with commissioning due forcompletion in Q4 2014 Bulyanhulu run of mine head grade increased to 8.8 grams per tonne asunderground development progressed well Full year production guidance reiterated of upwards of 700,000 ounces with costguidance tightened to around US$740 and around US$1,100 per ounce sold, forcash costs and AISC respectively (previously US$740-790 and US$1,100-1,175) Financial Highlights Cash position increased by US$17 million to stand at US$287 million at 30September 2014 Revenue of US$241 million, 9% up on Q3 2013, as higher sales volumes more thanoffset lower average realised gold prices EBITDA1,3 of US$76 million, 17% higher than Q3 2013, due to increased revenueand lower cash costs Net earnings1,3 of US$28 million (US6.9 cents per share), 60% higher than Q32013 Operational cash flow of US$101 million (155% higher than Q3 2013), driven byincreased EBITDA and indirect tax refunds Capital expenditure of US$81 million was in line with Q3 2013 Remain on track to exceed the planned US$185 million of cost savings as set outin the Operational Review Three months ended 30 Nine months ended September 30 September (Unaudited) 2014 20132 2014 20132 Gold Production (ounces) 190,986 164,429 537,567 471,627 Gold Sold (ounces) 178,490 161,061 509,437 475,430 Cash cost (US$/ounce)1 679 728 727 826 AISC (US$/ounce)1 1,098 1,270 1,111 1,411 Average realised gold price (US$/ounce)1 1,268 1,309 1,282 1,421 Revenue (US$'000) 240,878 220,042 686,387 707,402 EBITDA1,3 (US$'000) 75,835 64,769 207,456 195,541 Net earnings/(loss)3 (US$'000) 28,444 17,830 69,266 (683,400) Basic earnings/(loss) per share (EPS) (cents)3 6.9 4.3 16.9 (166.6) Cash generated from operating activities (US$'000) 101,428 39,851 228,535 138,922 Capital expenditure4 (US$'000) 81,251 81,291 195,995 246,100 1 These are non-IFRS measures. Refer to page 10 for definitions 2 2013 comparative amounts have been restated to exclude Tulawaka 3 EBITDA and net earnings consist of earnings from both continuing anddiscontinued operations 4 Excludes non-cash reclamation asset adjustments and includes financelease purchases Operational Review Our continued delivery on the cost saving targets set out at the start of theOperational Review is highlighted by a further reduction in Q3 2014 AISC versusQ2 2014 and a 14% reduction from Q3 2013. In combination with a strongproduction profile, we generated a further US$17 million of net cash during thequarter and have now improved on our cash position from the beginning of theyear, notwithstanding our continuing investment in growth, dividends and in thedisposal of Tulawaka (together with its associated closure liabilities). Weremain on track to exceed the planned US$185 million of cost savings as set outin the Operational Review by the end of 2014. Beyond this we continue toanticipate a further reduction in our AISC as we see the benefits of furtherbusiness improvement initiatives being implemented throughout the business withparticular focus on mining and development efficiencies. Board Changes During the third quarter, Rick McCreary stepped down as Non-Executive Directorof the Company. The ABG Board now comprises ten Directors, including sevenIndependent Non-Executive Directors, two Non-Executive Directors (nominees fromBarrick Gold Corporation) and one Executive Director. Indirect Taxes Further progress has been made with respect to the build-up of VAT, and theCompany received net refunds of US$14 million during the quarter. As a result,as at 30 September 2014, the outstanding amount relating to the total indirecttax receivable, not covered by the 2011 Memorandum of Settlement, stood atUS$51 million, roughly US$45 million lower than 31 December 2013.Notwithstanding the significant progress made so far this year, we arecontinuing discussions with the Tanzanian Government with respect to theestablishment of an appropriate mechanism to safeguard the recoverability ofVAT payments over the long term, specifically with respect to VAT paid ondomestic goods and services. We will provide feedback as these discussionsprogress. BulyanhuluCIL Expansion During the quarter, we progressed the commissioning of the new CIL circuit atBulyanhulu and are nearing the completion of the commissioning stage. Someinitial issues were experienced with the elution circuit performance anddetoxification of the tailings, but these were largely resolved by the end ofthe quarter. At quarter end tonnes treated from the reclaimed tailingsreflected the designed levels. During the quarter, the new CIL circuit produced5,097 ounces from 220,000 tonnes of reclaimed tailings. GokonaUnderground The study into the potential to transition the Gokona deposit at North Marafrom an open pit to an underground operation is advancing in line withexpectations. Progress to date underlines our confidence that the project willgenerate positive returns and help sustain the current production profile ofthe mine. During Q3 2014, work continued on the development of the explorationportal with 48 metres of advancement achieved. Year to date we have spentUS$6.4 million of expansionary capital on the exploration portal out of thepreviously communicated amount for the year of US$10 million. Investor Day ABG will be hosting an Investor Day in London, commencing at 09:00 GMT on 27November 2014 to outline the Company's longer term strategy and outlook. Theday will be attended by ABG senior management and is primarily for researchanalysts and institutional investors. Space at the event is limited; pleasetherefore register your interest in attending with Sarah VethaakSVethaak@bellpottinger.com. For those who cannot attend in person, thepresentations will be webcast through our website, with a recording availableafter the event. Outlook As announced as part of the interim results, we continue to forecast productionfor the year to be in excess of 700,000 ounces. We now anticipate full yearcash costs to be around US$740 per ounce sold (previously US$740-US790 perounce sold), and full year all-in sustaining costs around US$1,100 per ouncesold (previously US$1,100-US$1,175 per ounce sold). Key statistics - restated to reflect Tulawaka as a discontinued operation Three months ended 30 Nine months ended September 30 September (Unaudited) 2014 20133 2014 20133 Tonnes mined (thousands of tonnes) 11,016 13,388 30,908 42,506 Ore tonnes mined (thousands of tonnes) 1,981 1,697 5,889 5,074 Ore tonnes processed (thousands of tonnes) 2,238 2,114 6,008 6,097 Process recovery rate (percent) 87.9% 88.3% 88.9% 88.7% Head grade (grams per tonne) 3.0 2.7 3.1 2.7 Gold production (ounces) 190,986 164,429 537,567 471,627 Gold sold (ounces) 178,490 161,061 509,437 475,430 Copper production (thousands of pounds) 4,531 2,838 10,961 8,422 Copper sold (thousands of pounds) 4,242 2,448 9,633 8,561 Cash cost per tonne milled (US$/t)¹ 54 55 62 64 Per ounce data Average spot gold price2 1,282 1,326 1,288 1,456 Average realised gold price¹ 1,268 1,309 1,282 1,421 Total cash cost¹ 679 728 727 826 All-in sustaining cost¹ 1,098 1,270 1,111 1,411 Average realised copper price (US$/lb) 3.14 3.20 3.10 3.22 Financial results - restated to reflect Tulawaka as a discontinued operation Three months ended Nine months ended 30 September 30 September (Unaudited, in US$'000 unless otherwise stated) 2014 20133 2014 20133 Continuing operations: Revenue 240,878 220,042 686,387 707,402 Cost of sales (164,072) (157,303) (496,546) (544,036) Gross profit 76,806 62,739 189,841 163,366 Corporate administration (8,436) (8,016) (22,411) (25,600) Share based payments (1,055) (1,520) (5,972) 2,341 Exploration and evaluation costs (2,958) (3,232) (13,953) (10,948) Corporate social responsibility expenses (3,068) (2,343) (7,375) (8,571) Impairment charges - - - (910,989) Other charges4 (13,630) (5,836) (26,412) (21,430) Profit/(loss) before net finance expense and taxation 47,569 41,792 113,718 (811,831) Finance income 309 77 939 1,072 Finance expense (2,357) (2,394) (6,861) (7,090) Profit/(loss) before taxation 45,611 39,475 107,796 (817,849) Tax (expense)/credit (17,167) (15,921) (39,883) 168,727 Net profit/(loss) from continuing operations 28,444 23,554 67,913 (649,122) Discontinued operations: Net (loss)/gain from discontinued operations - (8,226) 886 (48,968) Net profit/(loss) for the year 28,444 15,328 68,799 (698,090) Attributed to: Owners of the parent (net earnings) 28,444 17,830 69,266 (683,400) - Continuing operations 28,444 23,554 67,913 (649,122) - Discontinued operations - (5,724) 1,353 (34,279) Non-controlling interests - (2,502) (467) (14,690) - Discontinued operations - (2,502) (467) (14,690) 1 These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to "Non IFRS measures"' on page 10 for definitions. 2 Reflect the London PM fix price. 3 Restated for the reclassification of Tulawaka as a discontinued operation. 4 Other charges is predominantly made up of US$4.5 million retrenchment costs,US$3.5 million of non-cash net FX losses, US$2.5 million of non-cash derivativelosses and US$2.3 million of legal costs. For further information, please visit our website: www.africanbarrickgold.comor contact: African Barrick Gold plc +44 (0) 207 129 7150 Brad Gordon, Chief Executive Officer Andrew Wray, Chief Financial Officer Giles Blackham, Investor Relations Manager Bell Pottinger +44 (0) 203 775 2500 Daniel Thöle About ABG ABG is Tanzania's largest gold producer and one of the largest gold producersin Africa. We have three producing mines, all located in Northwest Tanzania,and several exploration projects at various stages of development in Tanzaniaand Kenya. We have a high quality asset base, solid growth opportunities and aclear strategy of optimising, expanding and growing our business. Maintaining our licence to operate through acting responsibly in relation toour people, the environment and the communities in which we operate is centralto achieving our objectives. ABG is a UK public company with its headquarters in London. We are listed onthe Main Market of the London Stock Exchange under the symbol ABG and have asecondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporationremains our majority shareholder. ABG reports in US dollars in accordance withIFRS as adopted by the European Union, unless otherwise stated in this report. Conference call A conference call will be held for analysts and investors on 23 October 2014 at09:30 London time. The access details for the conference call are as follows: Participant dial in: +44 (0) 203 003 2666 / +1 866 966 5335 Password: ABG A recording of the conference call will be made available atwww.africanbarrickgold.com/investors/financial-reports/2014.aspx after thecall. FORWARD- LOOKING STATEMENTS This report includes "forward-looking statements" that express or implyexpectations of future events or results. Forward-looking statements arestatements that are not historical facts. These statements include, withoutlimitation, financial projections and estimates and their underlyingassumptions, statements regarding plans, objectives and expectations withrespect to future production, operations, costs, projects, and statementsregarding future performance. Forward-looking statements are generallyidentified by the words "plans," "expects," "anticipates," "believes,""intends," "estimates" and other similar expressions. All forward-looking statements involve a number of risks, uncertainties andother factors, many of which are beyond the control of ABG, which could causeactual results and developments to differ materially from those expressed in,or implied by, the forward-looking statements contained in this report. Factorsthat could cause or contribute to differences between the actual results,performance and achievements of ABG include, but are not limited to, changes ordevelopments in political, economic or business conditions or national or locallegislation or regulation in countries in which ABG conducts - or may in thefuture conduct - business, industry trends, competition, fluctuations in thespot and forward price of gold or certain other commodity prices (such ascopper and diesel), currency fluctuations (including the US dollar, SouthAfrican rand, Kenyan shilling and Tanzanian shilling exchange rates), ABG'sability to successfully integrate acquisitions, ABG's ability to recover itsreserves or develop new reserves, including its ability to convert itsresources into reserves and its mineral potential into resources or reserves,and to process its mineral reserves successfully and in a timely manner, ABG'sability to complete land acquisitions required to support its miningactivities, operational or technical difficulties which may occur in thecontext of mining activities, delays and technical challenges associated withthe completion of projects, risk of trespass, theft and vandalism, changes inABG's business strategy including, the ongoing implementation of OperationalReviews, as well as risks and hazards associated with the business of mineralexploration, development, mining and production and risks and factors affectingthe gold mining industry in general. Although ABG's management believes thatthe 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 statementscontained in this report. Any forward-looking statements in this report onlyreflect information available at the time of preparation. Subject to therequirements of the Disclosure and Transparency Rules and the Listing Rules orapplicable law, ABG explicitly disclaims any obligation or undertaking publiclyto update or revise any forward-looking statements in this report, whether as aresult of new information, future events or otherwise. Nothing in this reportshould be construed as a profit forecast or estimate and no statement madeshould be interpreted to mean that ABG's profits or earnings per share for anyfuture period will necessarily match or exceed the historical published profitsor earnings per share of ABG. Third Quarter Review During the third quarter, we continued to see strong operational results, withtotal production of 190,986 ounces, an increase of 16% on Q3 2013. Sales ouncesamounted to 178,490, 7% lower than production due to the timing of concentrateand dore shipments at quarter end. We expect to sell these ounces in Q4 2014. Bulyanhulu delivered a strong performance with production of 63,333 ounces, 21%higher than Q3 2013 due to a 12% increase in head grade as a result of highermined grade given improved availability of high grade stopes. The new CIL plantis in the final stages of commissioning and produced 5,097 ounces in Q3 2014. At North Mara, gold production of 64,332 ounces was down 5% on Q3 2013 asexpected due to a lower mine grade. Throughput and recovery rates for Q3 2014were in line with Q3 2013. At Buzwagi, gold production for the quarter of 63,321 ounces was 43% higherthan in Q3 2013 driven by a 45% increase in head grade due to increased minegrades from the main ore zone. Ore tonnes mined were 9% higher than in Q3 2013due to previously communicated changes in the mine plan to focus on the mainore zones. Recoveries increased significantly during the quarter to 94.8%compared to 87.3% in the prior year period driven by the improved gradetogether with process plant efficiencies. Copper production for the quarter of 4.5 million pounds was 60% higher than inQ3 2013 (2.8 million pounds), due to higher copper grades, mainly atBulyanhulu, and higher concentrate production, mainly at Buzwagi. Total tonnes mined during the quarter amounted to 11.0 million tonnes, adecrease of 18% on Q3 2013. Ore tonnes mined from open pits amounted to 1.7million tonnes compared to 1.5 million in Q3 2013, driven by the increasedfocus on mining ore at North Mara due to mine sequencing and at Buzwagi due tothe change in the mine plan. Ore tonnes processed amounted to 2.2 million tonnes, an increase of 6% on Q32013 primarily driven by higher throughput at Bulyanhulu due to thecommissioning of the new CIL plant. Head grade for the quarter of 3.0 grams per tonne (g/t) was 10% higher than inQ3 2013 (2.7 g/t). This was due to the higher mined grade at Buzwagi as miningfocused on the main ore zone and at Bulyanhulu, due to improved availability ofhigh grade stopes. Our cash costs for the quarter were 7% lower than in Q3 2013, and amounted toUS$679 per ounce sold. The decrease was primarily due to: the impact of the increased production base (US$125/oz); and the impact of a reduction in the international workforce (28% down on the sameperiod in 2013), slightly offset by some of these positions being filled bynational workers (US$17/oz). This was partially offset by the following factors (US$95/oz): increased maintenance costs driven by increased underground equipmentmaintenance activity at Bulyanhulu; increased contracted services at Bulyanhulu due to ore development workperformed by a contractor; lower capitalised development costs at North Mara as a result of the revisedmine plan driving a lower strip ratio; higher consumables costs at Bulyanhulu driven by increased mining andprocessing activity. AISC of US$1,098 per ounce sold for the quarter were 14% lower than Q3 2013,predominantly due to lower cash costs as explained above, combined with lowersustaining capital expenditure and capitalised development. Capital expenditure for the quarter amounted to US$81.4 million compared toUS$81.3 million in Q3 2013. Capital expenditure mainly consisted of capitaliseddevelopment expenditure (US$41.8 million) relating to investment in theBulyanhulu CIL Expansion project (US$15.6 million), investments in tailings andinfrastructure (US$9.9 million), investment in the Gokona Underground projectat North Mara (US$5.4 million), investment in the Bulyanhulu Lower West project(US$3.6 million) and component costs (US$3.5 million). Cash flow from operations was US$101 million, compared to Q3 2013 of US$40million. The increase primarily relates to increased EBITDA and favourableworking capital movements. The working capital inflow for Q3 2014 of US$23million compared to an investment in working capital in Q3 2013 of US$36million and was primarily driven by the timing of the settlement of payablesand a decrease in indirect tax receivables of US$14 million in Q3 2014. The cash position increased during Q3 2014 by US$17 million to US$287 millionat 30 September 2014 (31 December 2013: $282 million), after the payment ofinterim dividends of US$5.7 million and cash expansion capital expenditure ofUS$25.7 million. Mine Site Review Bulyanhulu Key statistics Three months ended 30 Nine months endedBulyanhulu September 30 September (Unaudited) 2014 2013 2014 2013 Key operational information: Ounces produced oz 63,333 52,126 168,753 145,100 Ounces sold oz 51,409 50,767 152,574 138,569 Cash cost per ounce sold US$/oz 752 769 828 936 AISC per ounce sold US$/oz 1,350 1,183 1,283 1,437 Copper production Klbs 1,488 1,269 3,919 3,507 Copper sold Klbs 1,153 1,169 3,500 3,204 Underground ore tonnes hoisted Kt 236 232 664 650 Run-of-mine processing: Ore milled Kt 236 228 661 642 Head grade g/t 8.8 7.8 8.6 7.7 Mill recovery % 87.1% 90.5% 89.9% 90.8% Ounces produced oz 58,236 52,126 163,383 145,100 Cash cost per tonne milled US$/t 164 171 191 202 Reprocessed tailings: Ore milled Kt 220 - 227 - Head grade g/t 1.4 - 1.4 - Mill recovery % 52.5% - 53.8% - Ounces produced oz 5,097 - 5,370 - Capital Expenditure: - Sustaining capital US$('000) 8,970 5,314 13,452 20,860 - Capitalised development US$('000) 17,527 10,576 45,941 34,678 - Expansionary capital US$('000) 15,907 20,910 41,738 73,331 42,404 36,800 101,131 128,869 - Non-cash reclamation assetadjustments US$('000) (2,399) (831) 6,322 (10,039) Total Capital Expenditure US$('000) 40,005 35,969 107,453 118,830 Operating performance Gold production of 63,333 ounces for the quarter was 21% higher than in Q32013, due to a 12% increase in head grade in the main plant driven by improvedavailability of high grade stopes and the on-going commissioning of the CILplant which contributed 5,097 ounces. Gold ounces sold of 51,409 ounces were inline with Q3 2013, but lower than production due to the timing of production atthe quarter end, impacting the timing of shipments. Recoveries were temporarilylower during the quarter but returned to above 90% by the end of the quarter.Copper production of 1.5 million pounds for the quarter was 17% higher than inQ3 2013 due to higher throughput and a higher copper grade. During the quarter, we progressed the commissioning of the new CIL circuit atBulyanhulu and are nearing the completion of the commissioning stage. Someissues were experienced initially with the elution circuit performance anddetoxification of the tailings, but these have been largely resolved. Atquarter end tonnes treated from the reclaimed tailings reflected the designedlevels. During the quarter we incurred total development costs (expensed andcapitalised) at the Upper East and Lower West of US$1.3 million (US$6.0 millionYTD) and US$5.9 million (US$10.7 million YTD), respectively. In the Upper Eastwe commenced ore development as expected in August 2014 and in the Lower Westwe continue to expect to access higher grade ore in Q4 2014. ABG expects thatthe combined total development costs (expensed and capitalised) required todevelop the Upper East and Lower West in 2014 will be US$30 million, asplanned, which will be included in the Bulyanhulu and Group AISC figures. Cash costs for the quarter of US$752 per ounce sold were 2% lower than theprior year of US$769, and 18% lower than Q2 2014 due to the higher productionbase and lower labour costs as a result of the 19% reduction in internationalheadcount. During the quarter, the mine commenced a right-sizing of theworkforce with a reduction of over 500 employees, predominantly throughvoluntary severance packages. The cost benefits of this initiative will becomeevident in Q4 2014. AISC per ounce sold for the quarter of US$1,350 was 14% higher than in Q3 2013(US$1,183) as a result of higher sustaining capital expenditure and capitaliseddevelopment as explained above. Capital expenditure for the quarter of US$42.4 million was 15% higher than inQ3 2013 of US$36.8 million. Capital expenditure consisted mainly of capitalisedunderground development costs (US$17.5 million, inclusive of US$3.6 million ofLower West spend) and expansionary capital investment relating to the CILcircuit (US$15.6 million). Buzwagi Key statistics Three months ended 30 Nine months ended 30Buzwagi September September (Unaudited) 2014 2013 2014 2013 Key operationalinformation: Ounces produced oz 63,321 44,408 165,665 130,154 Ounces sold oz 65,641 40,599 158,083 136,966 Cash cost per ounce sold US$/oz 645 1,012 782 946 AISC per ounce sold US$/oz 950 1,436 1,078 1,582 Copper production Klbs 3,043 1,569 7,042 4,915 Copper sold Klbs 3,089 1,279 6,133 5,357 Mining information: Tonnes mined Kt 6,286 7,628 17,632 24,933 Ore tonnes mined Kt 1,090 1,001 3,444 2,502 Processing information: Ore milled Kt 1,054 1,165 3,034 3,455 Head grade g/t 2.0 1.4 1.8 1.3 Mill recovery % 94.8% 87.3% 92.0% 87.9% Cash cost per tonne milled US$/t 40 35 41 38 Capital Expenditure - Sustaining capital US$('000) 2,816 6,623 8,592 27,280 - Capitalised development US$('000) 13,441 7,986 28,598 49,324 16,257 14,609 37,190 76,604 - Non-cash reclamationasset adjustments US$('000) (652) (103) 187 (6,912) Total Capital Expenditure US$('000) 15,605 14,506 37,376 69,692 Operating performance Gold production for the quarter of 63,321 ounces was 43% higher than in Q32013, driven by increased head grade as a result of mining at the main ore zoneat the end of the Stage 2 pit. Gold sold for the quarter amounted to 65,641ounces, 62% above that of Q3 2013 due to the increased production base, and 4%higher than production as a result of the sale of concentrate ounces on hand atthe end of Q2 2014. Tonnes milled during the quarter were 10% lower than in Q3 2013 due to lowerthroughput rates as a result of the timing of downtime relating to plantmaintenance. Recoveries increased by 9% over Q3 2013 as a result of increasedgrade and business improvement initiatives providing improved blending andmanagement of the CIL plant's performance. Total tonnes mined for the quarter of 6.3 million tonnes were 18% lower than inQ3 2013 due to changes in the mine plan compared to 2013. Ore tonnes mined of1.1 million tonnes were 9% higher than Q3 2013 for the same reason. Copper production of 3.0 million pounds for the quarter was 94% higher than inQ3 2013 driven by the increased concentrate production as a result of highercopper grades processed. Cash costs for the quarter of US$645 per ounce sold were 36% lower than in Q32013 (US$1,012). Cash costs were positively impacted by increased productionlevels and resultant co-product revenue, savings in contracted services (lowerrates) and labour costs (47% reduction in the international workforce) andincreased capitalised development costs driven by a higher proportion of wastematerial removed from Stages 2 and 3 of the open pit. This was partially offsetby higher maintenance costs due to increased maintenance activity and increasedsales related costs due to the higher sales volumes. AISC per ounce sold for the quarter of US$950 was 34% lower than in Q3 2013(US$1,436). This was driven by the lower cash cost base, higher production baseand lower sustaining capital. Capital expenditure for the quarter of US$16.3 million was 11% higher than inQ3 2013 (US$14.6 million). Key capital expenditure for the quarter includedcapitalised stripping costs (US$13.4 million) as a result of the focus on wastemovement in Stage 3 of the pit, investments in tailings and infrastructure(US$1.8 million) and component change out costs (US$0.7 million). North Mara Key statistics Three months ended 30 Nine months ended 30North Mara September September (Unaudited) 2014 2013 2014 2013 Key operationalinformation: Ounces produced oz 64,332 67,895 203,148 196,373 Ounces sold oz 61,440 69,695 198,780 199,895 Cash cost per ounce sold US$/oz 655 532 606 667 AISC per ounce sold US$/oz 1,015 1,199 961 1,274 Mining information: Tonnes mined Kt 4,494 5,528 12,612 16,923 Ore tonnes mined Kt 655 464 1,781 1,923 Processing information: Ore milled Kt 721 720 2,086 2,000 Head grade g/t 3.2 3.4 3.5 3.5 Mill recovery % 87.2% 86.9% 87.3% 87.1% Cash cost per tonne milled US$/t 56 52 58 67 Capital Expenditure: - Sustaining capital US$('000) 4,994 10,862 13,082 34,824 - Capitalised development US$('000) 10,834 23,026 36,226 51,943 - Expansionary capital US$('000) 6,544 - 7,522 504 22,372 33,888 56,830 87,271 - Non-cash reclamationasset adjustments US$('000) (1,574) (815) 3,784 (6,765) Total Capital Expenditure US$('000) 20,798 33,073 60,614 80,506 Operating performance Production for the quarter of 64,332 ounces was 5% lower than in Q3 2013 due tothe lower head grade, as expected, reflecting the higher proportion of miningfrom the Nyabirama pit at lower grades than the Gokona pit. Milled tonnesexceeded mined tonnes as mined tonnes were blended with stockpiles. Gold ouncessold for the quarter of 61,440 ounces were 4% lower than production due to thetiming of dore production at the quarter end impacting on the timing of sales. Cash costs for the quarter of US$655 per ounce sold were 23% higher than in Q32013 (US$532). Cash costs were negatively impacted by lower production levelsand lower capitalisation of waste stripping costs, partly offset by the impactof a 38% reduction in the international workforce, lower maintenance costs andlower freight costs. AISC per ounce sold for the quarter of US$1,015 was 15% lower than in Q3 2013(US$1,199) due to lower sustaining capital and capitalised developmentexpenditure, partly offset by the higher cash costs and the lower productionbase as outlined above. Capital expenditure for the quarter of US$22.4 million was 34% lower than in Q32013 (US$33.9 million), due to lower capitalised stripping and lower sustainingcapital expenditure, slightly offset by increased expansionary expenditure. Keycapital expenditure included capitalised stripping costs (US$10.8 million),investments in tailings and infrastructure (US$1.9 million) and component costs(US$2.9 million). Expansion capital of US$6.5 million relates mainly to portaldevelopment costs relating to the Gokona Underground feasibility study (US$5.4million). The study into the potential to transition the Gokona deposit at North Marafrom an open pit to an underground operation is advancing in line withexpectations. Progress to date underlines our confidence that the project willgenerate positive returns and help sustain the current production profile ofthe mine. During Q3 2014, work continued on the development of the explorationportal with 48 metres of advancement achieved. Year to date we have spentUS$6.4 million of expansionary capital on the exploration portal out of thepreviously communicated amount for the year of US$10 million. Exploration Review Bulyanhulu During Q3 2014, a total of 2,218 metres of diamond core were drilled, whichcompleted this year's surface drilling programmes at Bulyanhulu. The drillingwas continuing to target potential resource extensions west of the currentlydelineated resources on both Reef 1 and Reef 2 systems. Encouraging resultsfrom the programme this quarter include the following significantintersections: BGMDD0054W5: 0.5m @ 13.5g/t Au from 1,839.5m - Reef 2 series BGMDD0054W5: 0.5m @ 23.0g/t Au from 1,842.0m - Reef 2 series BGMDD0054W6: 0.94m @ 14.3g/t Au from 355.6m - Reef 2 series BGMDD0054W6: 0.50m @ 31.1g/t Au from 680.5m - Reef 2 series BGMDD0056W2: 0.50m @ 15.9g/t Au from 892.5m - Reef 2 series BGMDD0056W2: 2.25m @ 26.6g/t Au from 906.5m - Reef 2 series BGMDD0056W2: 0.50m @ 26.3g/t Au from 944.0m - Reef 2 series BGMDD0056W2: 0.70m @ 6.50g/t Au from 947.6m - Reef 2 series BGMDD0056W2: 0.50m @ 16.7g/t Au from 1,168.1m - Reef 2 series BGMDD0056W2: 1.25m @ 16.5g/t Au from 1,550.3m - Reef 1 The results from these holes demonstrate that gold mineralisation, particularlyon the Reef 2 vein system, continues up to 2 kilometres west of the currentlydelineated mineable resources. Therefore, there is potential to add furtherresource ounces at Bulyanhulu on Reef 2, at relatively more shallow levels(0.1g/t Au), of which 106 holes intersected zones of >0.50g/t Au. A programme of gradient and pole-dipole IP and resistivity across selectedgold-in-soil anomalies throughout the Lake Zone Camp in the central and westernareas of the project was completed. A total of 190 line kilometres of surveyshave now been completed. Thirteen pole-dipole IP targets showing distinctresistivity and/or chargeability zones coincident with the gold-in-soilanomalies have been delineated and will be considered as priority targets forfuture drilling programmes. A 5,000 metre diamond core drilling programme is planned for Q4 2014 to followup on the best significant Aircore intercepts in the Liranda Corridor. Twodiamond core holes are also planned for the Abimbo prospect, a high priorityanomaly in the Lake Zone camp with coincident IP, resistivity andgold-in-soils. Non-IFRS Measures ABG has identified certain measures in this report that are not measuresdefined under IFRS. Non-IFRS financial measures disclosed by management areprovided as additional information to investors in order to provide them withan alternative method for assessing ABG's financial condition and operatingresults. These measures are not in accordance with, or a substitute for, IFRS,and may be different from or inconsistent with non-IFRS financial measures usedby other companies. These measures are explained further below. Average realised gold price per ounce sold is a non-IFRS financial measurewhich excludes from gold revenue: Unrealised mark-to-market gains and losses on provisional pricing from copperand gold sales contracts; and Export duties. Cash cost per ounce sold is a non-IFRS financial measure. Cash costs includeall costs absorbed into inventory, as well as royalties, and production taxes,and exclude capitalised production stripping costs, inventory purchaseaccounting adjustments, unrealised gains/losses from non-hedge currency andcommodity contracts, depreciation and amortisation and corporate socialresponsibility charges. Cash cost is calculated net of co-product revenue. The presentation of these statistics in this manner allows ABG to monitor andmanage those factors that impact production costs on a monthly basis. Cash costper ounce sold is calculated by dividing the aggregate of these costs by goldounces sold. Cash costs and cash cost per ounce sold are calculated on aconsistent basis for the periods presented. All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure isin accordance with the World Gold Council's guidance issued in June 2013. It iscalculated by taking cash cost per ounce sold and adding corporateadministration costs, reclamation and remediation costs for operating mines,corporate social responsibility expenses, mine exploration and study costs,capitalised stripping and underground development costs and sustaining capitalexpenditure. This is then divided by the total ounces sold. A reconciliationbetween cash cost per ounce sold and AISC is presented below: (Unaudited) Three months ended 30 September 2014 Three months ended 30 September 2013 ABG Group ABG Group North ongoing North ongoing(US$/oz sold) Bulyanhulu Mara Buzwagi operations Bulyanhulu Mara Buzwagi operations Cash cost per ounce sold 752 655 645 679 769 532 1,012 728 Corporate administration 62 44 39 47 57 31 47 50 Share based payments 1 (0) 3 6 4 2 3 9 Rehabilitation 9 20 4 11 6 22 9 14 Mine exploration 6 3 1 3 3 8 2 5 CSR expenses 5 22 11 17 11 22 3 15 Capitalised development 341 176 205 234 208 330 197 258 Sustaining capital 174 95 43 101 125 252 163 190 Total continuing operations 1,350 1,015 950 1,098 1,183 1,199 1,436 1,270 Discontinued operations - 5 Total 1,098 1,275 (Unaudited) Nine months ended 30 September 2014 Nine months ended 30 September 2013 ABG Group ABG Group North ongoing North ongoing(US$/oz sold) Bulyanhulu Mara Buzwagi operations Bulyanhulu Mara Buzwagi operations Cash cost per ounce sold 828 606 782 727 936 667 946 826 Corporate administration 48 37 38 44 74 38 54 54 Share based payments 2 1 4 12 (0) (1) (1) (5) Rehabilitation 8 19 6 12 8 30 18 20 Mine exploration 3 2 1 2 4 13 2 7 CSR expenses 5 17 12 14 7 27 4 18 Capitalised development 301 182 181 217 250 260 360 286 Sustaining capital 88 97 54 83 158 240 199 205 Total continuing operations 1,283 961 1,078 1,111 1,437 1,274 1,582 1,411 Discontinued operations - 18 Total 1,111 1,429 AISC is intended to provide additional information on the total sustaining costfor each ounce sold, taking into account expenditure incurred in addition todirect mining costs, depreciation and selling costs. Cash cost per tonne milled is a non-IFRS financial measure. Cash costs includeall 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 fromnon-hedge currency and commodity contracts, depreciation and amortisation andcorporate social responsibility charges. Cash cost is calculated net ofco-product revenue. Cash cost per tonne milled is calculated by dividing theaggregate of these costs by total tonnes milled. EBITDA is a non-IFRS financial measure. ABG calculates EBITDA as net profit orloss for the period excluding: Income tax expense; Finance expense; Finance income; Depreciation and amortisation; Impairment charges of goodwill and other long-lived assets; and Discontinued operations EBITDA is intended to provide additional information to investors and analysts.It does not have any standardised meaning prescribed by IFRS and should not beconsidered in isolation or as a substitute for measures of performance preparedin accordance with IFRS. EBITDA excludes the impact of cash costs of financingactivities and taxes, and the effects of changes in operating working capitalbalances, and therefore is not necessarily indicative of operating profit orcash flow from operations as determined under IFRS. Other companies maycalculate EBITDA differently. EBIT is a non-IFRS financial measure and reflects EBITDA adjusted fordepreciation and amortisation and goodwill impairment charges. Mining statistical information The following describes certain line items used in the ABG Group's discussionof key performance indicators: Open pit material mined - measures in tonnes the total amount of open pit oreand waste mined Underground ore tonnes hoisted - measures in tonnes the total amount ofunderground ore mined and hoisted Total tonnes mined includes open pit material plus underground ore tonneshoisted Strip ratio - measures the ratio of waste–to–ore for open pit material mined Ore milled - measures in tonnes the amount of ore material processed throughthe mill Head grade - measures the metal content of mined ore going into a mill forprocessing Milled recovery - measures the proportion of valuable metal physicallyrecovered in the processing of ore. It is generally stated as a percentage ofthe metal recovered compared to the total metal originally present Run-of-mine processing - measures the ore tonnes processed from the mainunderground mining activities at Bulyanhulu. Reprocessed tailings - measures the tonnes processed through the new CILcircuit from reclaimed tailing facilities at Bulyanhulu