25 Jul 2014 07:00
AFRICAN BARRICK GOLD PLC - Half-year 2014 resultsAFRICAN BARRICK GOLD PLC - Half-year 2014 results
PR Newswire
London, July 25
AFRICAN BARRICK GOLD 25 July 2014 Results for the 6 months ended 30 June 2014 (Unaudited) Based on IFRS and expressed in US Dollars (US$) African Barrick Gold plc ("ABG'') reports half year 2014 results "We are pleased to report strong results for H1 2014, with increased productionand continued cost discipline enabling the business to return to cashgeneration," said Brad Gordon, Chief Executive Officer of African Barrick Gold."We have now delivered our seventh successive reduction in quarterly all-insustaining costs (AISC) as we continue to drive operational improvementsthrough the business. During H1 2014 we produced 346,581 ounces of gold, animprovement of 13% on the same period in 2013, at an AISC of US$1,118 perounce, a reduction of 25% on the previous year. During the second quarter, wedelivered the first ounces from the Bulyanhulu CIL Expansion project withdevelopment work on the Bulyanhulu Upper East zone and the Gokona undergroundexploration portal progressing to plan. As a result of the strong H1 2014performance and the incorporation of the expected production from BulyanhuluUpper East, we now expect full year gold production to be in excess of 700,000ounces whilst continuing to target an AISC at the bottom of our guidance rangeof US$1,100-1,175 per ounce." Operational Highlights Q2 gold production of 178,206 ounces, 8% higher than Q2 2013, with gold salesof 171,563 ounces Q2 AISC1,2 of US$1,105 per ounce sold, 21% lower than Q2 2013, with cashcosts1,2 of US$749 per ounce H1 gold production of 346,581 ounces with gold sales of 330,947 ounces, 13% and5% respectively, higher than H1 2013 H1 AISC1,2 of US$1,118 per ounce sold and cash costs1,2 of US$752, respectivelydown 25% and 14% on H1 2013 First ounces produced from the Bulyanhulu CIL Expansion project, with finalcommissioning due to complete in Q3 2014 Bulyanhulu Upper East and North Mara Underground projects progressing well andon schedule Continued strong results from the West Kenya Exploration Project Financial Highlights Cash position increased during Q2 2014 by US$16 million to stand at US$270million as at 30 June 2014 H1 revenue of US$446 million, 9% below H1 2013, as the impact of a loweraverage realised gold price more than offset increased sales volumes H1 EBITDA1,3 of US$132 million, 1% higher than H1 2013, due to lower cash costs H1 net earnings1,3 of US$41 million (US10.0 cents per share) impacted by ahigher non cash tax charge during Q2 2014 H1 operational cash flow increased to US$127 million (28% higher than H1 2013) H1 capital expenditure of US$115 million, 45% lower than H1 2013 due to revisedmine plans and stringent capital controls Interim dividend of US1.4 cents per share declared, based on a new cash flowbased metric Three months ended 30 June Six months ended 30 June (Unaudited) 2014 20132 2014 20132 Gold Production (ounces) 178,206 164,439 346,581 307,198 Gold Sold (ounces) 171,563 170,092 330,947 314,369 Cash cost (US$/ounce)1 749 862 752 876 AISC (US$/ounce)1 1,105 1,404 1,118 1,483 Average realised gold price (US$/ounce)1 1,277 1,366 1,290 1,480 (in US$'000) Revenue 229,222 241,900 445,509 487,360 EBITDA1,3 66,959 48,828 131,621 130,771 Net earnings/(loss)3 18,412 (721,946) 40,822 (701,230) Basic earnings/(loss) per share (EPS) (cents)3 4.5 (176.0) 10.0 (171.0) Cash generated from operating activities 76,381 41,691 127,107 99,017 Capital expenditure4 58,964 103,347 114,744 209,056 1 These are non-IFRS measures. Refer to page 23 for definitions 2 2013 comparative amounts have been restated to exclude Tulawaka 3 EBITDA and net earnings consist of earnings from both continuing and discontinued operations 4 Excludes non-cash reclamation asset adjustments and includes finance lease 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 Q2 2014 AISC of 2%over Q1 2014 and an H1 2014 reduction of 25% over the previous period. Togetherwith a strong production profile, this enabled ABG to deliver a return to netcash flow generation during Q2 2014. We remain committed and on track todeliver against the US$185 million cost saving target as previously set out andreflected in our AISC guidance. Safety During the first half of the year, Bulyanhulu regrettably experienced onefatality. On 25 March 2014, Emmanuel Mrutu, one of our underground employeessadly passed away as a result of injuries sustained following a fall-of-groundincident. We have completed internal and external investigations into thistragic incident in order to mitigate any future reoccurrence. As a mark ofrespect operations ceased for a 24 hour period. During the second quarter Bulyanhulu experienced a non-operational fatalitywhich led to two weeks of disrupted operations at the mine. On 20 May 2014, anunderground employee went missing following a night shift. All miningoperations were initially ceased and an intensive search operation waslaunched. On 1 June 2014, the body of the deceased was found and investigationsby the Tanzanian authorities have subsequently determined that regrettably theemployee took his own life. Ensuring the safety of all our employees is paramount, and we have continuouslyimproved our safety performance at all of our operations over the past fewyears. In this regard, we have launched a behavioural safety programme calledWeCare at each of our operations to further enhance our safety processes. Board Changes During the six months ended 30 June 2014, David Hodgson stepped down asNon-Executive Director of the Company. The ABG Board now comprises elevenDirectors, including seven Independent Non-Executive Directors, one ExecutiveDirector and three nominees from Barrick Gold Corporation. Indirect Taxes Further progress has been made with respect to the build up of VAT, and theCompany received net refunds of US$18 million during the second quarter,bringing total net refunds for H1 2014 to approximately US$28 million. We havealso continued discussions with the Tanzanian Government on the establishmentof an appropriate mechanism to safeguard the recoverability of VAT paymentsover the long term. In this regard, we have submitted proposals for theestablishment of an escrow account for VAT paid on domestic goods, similar tothat currently used to provide for the refunding of VAT paid on imports and areawaiting further feedback on this proposal. As at 30 June 2014, the outstandingamount relating to the total indirect tax receivable, not covered by the 2011Memorandum of Settlement, stood at US$66 million, roughly US$30 million lowerthan 31 December 2013. Bulyanhulu Upper East In April 2014 the Board approved the next step in the optimisation ofBulyanhulu through the acceleration of mining from the Upper East Zone. TheZone is expected to produce 1.7 million ounces of gold, averaging 60,000 ouncesper annum over a life in excess of 25 years at an AISC of below our target runrate for Bulyanhulu for year-end 2015 of US$900 per ounce. Following the Board approval, the mine undertook waste development in the Zoneat a capital cost of US$4.7 million in Q2 2014. As expected, the mine willcommence ore development in Q3 2014 and this is expected to lead to productionfrom the Upper East Zone of approximately 15,000 ounces of gold in H2 2014,weighted towards the fourth quarter. ABG continues to expect that the 2014capital requirements for the project will be approximately US$15 million. Allcapital associated with the project to date has been categorised as capitaliseddevelopment and is included in the Bulyanhulu and Group AISC figures. Bulyanhulu Deep West We have also progressed the accelerated development of the Bulyanhulu Deep WestZone through a contractor to increase access to higher grade ore from Q4 2014.During Q2 2014 we incurred underground development capital costs of US$4.8million for the project and we expect to incur similar costs per quarter forthe remainder of 2014. This will be categorised as capitalised development andis included in the Bulyanhulu and Group AISC figures. Bulyanhulu CIL Expansion During the second quarter, we progressed the commissioning of the new CILcircuit at Bulyanhulu, which will add over 40,000 ounces per annum once fullyoperational, and are nearing completion of the commissioning stage. Towards theend of June, roughly 6,500 tonnes of rougher tailings were treated and pumpedinto the new CIL circuit, resulting in 273 ounces of gold being produced incircuit. We expect commissioning to be complete in early Q3 2014 with the firstgold pour in August and the ramp up of production to continue throughout thethird quarter. We continue to expect production of 20,000 ounces in 2014 fromthe project, and are investigating an option for accelerating the retreatmentof the historic higher grade tailings in preference to the rougher tailings. Gokona Underground The feasibility study into the potential to mine Gokona Cut 3 via anunderground operation progressed well in the second quarter and is on track tobe presented to the Board for approval in Q4 2014. During Q2 2014, ABG made thefinal decision on the location of the exploration portal which will provide theopportunity to develop a better understanding of the ore body, provide initialaccess to ore and drilling access to the deeper extensions of the ore body.Early works towards the construction of the portal are in progress with thefirst blast due in August. The total expansionary capital cost of the portal isexpected to be around US$10 million. Interim dividend To ensure that our dividend policy is more closely aligned with the cashgeneration of the business, the Board of Directors have approved an amendmentto the existing dividend policy such that rather than being based on netearnings it will now be based on operational cash flow after sustaining capitaland capitalised development but before expansion capital. The Board believes this metric more appropriately reflects both ABG's and thewider market's focus on cash flow generation as well as the commitment toongoing capital returns to shareholders. The dividend payout ratio of 15%-30%and the timing of the payment, being 1/3 of the dividend as an interim dividendand the balance as a final dividend, remain unchanged. In line with the above change, the Board of Directors is pleased to announcethe approval of an interim dividend for 2014 of US1.4 cents per share, anincrease of 40% when compared to H1 2013. The interim dividend will be payable on 22 September 2014 to holders on recordat 29 August 2014. The ex-dividend date will be 27 August 2014. ABG willdeclare the interim dividend in US dollars. Unless a shareholder elects toreceive dividends in US dollars, they will be paid in pounds sterling with theUS dollar amount being converted into pounds sterling at the exchange rateprevailing at the time. The last date for receipt of currency elections will be2 September 2014. The exchange rate for the conversion of the interim dividendwill be elected on or around 4 September 2014. Outlook Over the past six months we have continued to deliver a strong performance fromour operating portfolio, with sustainable cost containment across each of themines and production growth led by North Mara. As we move into the second halfof the year we expect the contribution from Bulyanhulu to increase as we beginto access higher grade areas, and both the CIL Expansion and the Upper Eastprojects begin to contribute ounces. At North Mara, we expect the head grade todrop in the second half of the year as the high grade ore from Gokona will beincreasingly blended with lower grade material from Nyabirama. At Buzwagi, weexpect the grade to revert to between 1.5-1.6g/t in the second half, butanticipate that throughput levels will increase. Following the approval of the Upper East Project and the Gokona Undergroundportal in Q2 2014 we expect capital expenditure for the year to be betweenUS$255-275 million. Sustaining capital (including land purchases) is expectedto be US$80-90 million, with an acceleration of spending in the second half ofthe year versus H1 2014. Capitalised development is expected to totalUS$125-135 million as a result of the accelerated development of the BulyanhuluDeep West Zone together with the categorisation of the Bulyanhulu Upper Eastproject as capitalised development. Expansionary capital is expected to amountto US$50 million which incorporates reduced residual CIL Expansion spend andthe Gokona Underground portal. As a result of the strong performance in H1 2014 and the addition of the UpperEast ounces into the 2014 plan, we are revising production guidance upwards forthe year to in excess of 700,000 ounces. We maintain our guidance for cashcosts of US$740 to US$790 per ounce and all-in sustaining costs of US$1,100 toUS$1,175 per ounce sold, and are targeting the bottom of both these ranges. Key statistics - restated to reflect Tulawaka as a discontinued operation Three months Six months ended ended 30 June 30 June (Unaudited) 2014 20133 2014 20133 Tonnes mined (thousands of tonnes) 10,355 15,141 19,892 29,118 Ore tonnes mined (thousands of tonnes) 2,115 1,727 3,908 3,378 Ore tonnes processed (thousands of tonnes) 1,925 2,072 3,770 3,983 Process recovery rate (percent) 89.8% 88.8% 89.5% 88.9% Head grade (grams per tonne) 3.2 2.7 3.2 2.7 Gold production (ounces) 178,206 164,439 346,581 307,198 Gold sold (ounces) 171,563 170,092 330,947 314,369 Copper production (thousands of pounds) 3,454 3,122 6,430 5,584 Copper sold (thousands of pounds) 2,874 2,756 5,391 6,113 Cash cost per tonne milled (US$/t) 67 71 66 69 Per ounce data Average spot gold price² 1,288 1,415 1,291 1,523 Average realised gold price1 1,277 1,366 1,290 1,480 Total cash cost1 749 862 752 876 All-in sustaining cost1 1,105 1,404 1,118 1,483 Average realised copper price (US$/lb) 3.16 3.04 3.07 3.23 Financial results - restated to reflect Tulawaka as a discontinued operation Three months ended Six months ended 30 30 June June (Unaudited, in US$'000 unless otherwise stated) 2014 20133 2014 20133 Continuing operations: Revenue 229,222 241,900 445,509 487,360 Cost of sales (173,333) (203,348) (332,474) (386,733) Gross profit 55,889 38,552 113,035 100,627 Corporate administration (7,618) (9,169) (13,975) (17,583) Share based payments (1,593) 425 (4,917) 3,861 Exploration and evaluation costs (6,025) (4,126) (10,995) (7,715) Corporate social responsibility expenses (1,811) (3,077) (4,307) (6,228) Impairment charges - (910,989) - (910,989) Other charges (6,159) (12,659) (12,782) (15,597) Profit/(loss) before net finance expense and taxation 32,683 (901,043) 66,059 (853,624) Finance income 280 407 630 995 Finance expense (2,102) (2,177) (4,504) (4,696) Profit/(loss) before taxation 30,861 (902,813) 62,185 (857,325) Tax (expense)/credit (12,047) 198,907 (22,716) 184,648 Net profit/(loss) from continuing operations 18,814 (703,906) 39,469 (672,677) Discontinued operations: Net (loss)/profit from discontinued operations (402) (25,722) 886 (40,741) Net profit/(loss) for the period 18,412 (729,628) 40,355 (713,418) Attributed to: Owners of the parent (net earnings) 18,412 (721,946) 40,822 (701,230) - Continuing operations 18,814 (703,906) 39,469 (672,677) - Discontinued operations (402) (18,040) 1,353 (28,553) Non-controlling interests - (7,682) (467) (12,188) - Discontinued operations - (7,682) (467) (12,188) 1 These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to "Non IFRS measures"' on page 23 for definitions. 2 Reflect the London PM fix price. 3 Restated for the reclassification of Tulawaka as a discontinued operation. For further information, please visit our website: www.africanbarrickgold.comor contact: African Barrick Gold plc +44 (0) 207 129 7150Brad Gordon, Chief Executive OfficerAndrew Wray, Chief Financial OfficerGiles Blackham, Investor Relations Manager Bell Pottinger +44 (0) 207 861 3232Daniel 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 Corporationis our majority shareholder. ABG reports in US dollars in accordance with IFRSas adopted by the European Union, unless otherwise stated in this report. Conference call A conference call will be held for analysts and investors on 25 July 2014 at11:30am 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. AFRICAN BARRICK GOLD LSE: ABG TABLE OF CONTENTS Interim Operating Review 7 Exploration Review 12 Financial Review 14 Going Concern Statement 22 Non-IFRS measures 23 Risk Review 25 Directors' Responsibility Statement 25 Auditor's Review Report 26 Condensed Interim Financial Information: - Consolidated Income Statement and Consolidated Statement of 27/Comprehensive Income 28 - Consolidated Balance Sheet 29 - Consolidated Statement of Changes in Equity 30 - Consolidated Statement of Cash Flows 31 - Notes to the Consolidated Interim Financial Information 32 Interim Operating Review Half Year Review For the first half of 2014 revenue amounted to US$445.5 million, 9% lower thanthe same period in 2013. Production of 346,581 ounces drove a 5% increase insales volumes (16,578 ounces) but this was more than offset by a 13% decreasein the average realised gold price of US$1,290 per ounce, down from US$1,480 inH1 2013. EBITDA increased by 1% to US$131.6 million in H1 2014 despite thelower revenue, mainly due to a US$30.2 million reduction in direct miningcosts, reflected in the 25% reduction of AISC to US$1,118 per ounce. Operationally, North Mara continued to mine high grade material from the Gokonapit which drove H1 2014 production of 138,816 ounces, up 8% on the prior yearperiod, and AISC down by 29% to US$936 per ounce sold. Bulyanhulu saw a 9%increase in head grade and a marginal increase in throughput which drove up H12014 production by 13% to 105,420 ounces and AISC down by 21% to US$1,249 perounce sold. Buzwagi saw a 34% reduction in total tonnes mined over the firsthalf of the year against H1 2013 which helped to reduce AISC by 29% to US$1,169per ounce sold. Production increased to 102,344 ounces as a result of highergrade material milled which more than offset the reduction in throughput. As a result of operational and working capital improvements, cash generatedfrom operating activities in H1 2014 increased by 28% over the prior yearperiod to US$127.1 million, in spite of the reduction in the average realisedsales price. Over the first six months of the year this was US$4.5 millionlower than EBITDA, but in Q2 2014 the Company generated positive net cash flowsof US$15.5 million. Our cash balance as at 30 June 2014 amounted to US$269.6 million. Capital expenditure for the six months ended 30 June 2014 amounted to US$114.7million compared to US$209.1 million in H1 2013. Capital expenditure primarilycomprised capitalised development expenditure (US$69.0 million), includingUS$4.7 million related to waste development from the Bulyanhulu Upper Eastproject and US$4.8 million related to the Bulyanhulu Deep West project,investment in the Bulyanhulu CIL Expansion project (US$24.9 million),investments in tailings and infrastructure (US$9.6 million) and component andequipment costs (US$6.7 million). Second Quarter Review The second quarter delivered positive results, with total production of 178,206ounces, an increase of 8% on Q2 2013. Sales ounces amounted to 171,563, 4%lower than production due to the timing of concentrate production at the end ofthe quarter. Copper production for the quarter of 3.5 million pounds was 11%higher than in Q2 2013 (3.1 million pounds), due to higher copper grades,mainly at Buzwagi. North Mara continued its strong performance during the quarter with a 10% yearon year increase in production due to improved throughput rates as a result ofimproved mill utilisation rates. The improved throughput rate was marginallyoffset by a 3% decrease in head grade. At Bulyanhulu, production of 50,241 ounces was 9% down on Q2 2013 due to lowerthroughput as a result of ore shortages given the disruption of miningoperations for two weeks in May 2014 following a non-operational fatality.Lower throughput was offset by a 6% increase in head grade as a result ofhigher mined grade given improved availability of high grade stopes. At Buzwagi, gold production for the quarter of 57,787 ounces was 26% higherthan in Q2 2013 driven by a 36% increase in head grade. Throughput rates werenegatively impacted by lower mill availability primarily as a result of there-lining of both the SAG and Ball mills during the quarter, while ore minedwas 67% higher in Q2 2013 year due to previously communicated changes in themine plan which reduced the amount of waste material removed when compared toQ2 2013. Total tonnes mined during the quarter amounted to 10.4 million tonnes, adecrease of 32% on Q2 2013. Ore tonnes mined from open pits amounted to 1.9million tonnes compared to 1.5 million in Q2 2013, driven by the increasedfocus on mining ore at Buzwagi due to the change in the mine plan, partiallyoffset by a reduction of tonnes mined at North Mara due to mine sequencing. Ore tonnes processed amounted to 1.9 million tonnes, a decrease of 7% on Q22013 primarily driven by reduced throughput at Buzwagi and at Bulyanhulu asdiscussed above. Head grade for the quarter of 3.2 grams per tonne (g/t) was 19% higher than inQ2 2013 (2.7 g/t). This was due to a higher mined grade at Buzwagi as miningfocused on the main ore zone as per the revised mine plan, and an improvementin grade at Bulyanhulu due to improved access to higher grade stopes. Our cash costs for the quarter were 13% lower than in Q2 2013, and amounted toUS$749 per ounce sold. The decrease was primarily due to: the impact of the increased production base (US$160/oz); the impact of the Operational Review (US$77/oz) on direct mining costs through: a reduction in the international workforce (29% down compared to the sameperiod in 2013); lower G&A costs driven by lower freight costs and aviation charges atBulyanhulu and North Mara; increased supplier discounts; and lower consumables costs driven by lower reagents and grinding media costs atNorth Mara and lower tyres and grinding media costs at Buzwagi. This was partially offset by lower capitalised development costs at Buzwagi andNorth Mara as a result of the revised mine plan driving a lower strip ratio(US$122/oz). All-in sustaining cost of US$1,105 per ounce sold for the quarter was 21% lowerthan Q2 2013, predominantly due to lower cash costs as explained above,combined with lower sustaining capital expenditure and capitalised development. Capital expenditure for the quarter amounted to US$59.0 million compared toUS$103.3 million in Q2 2013. Capital expenditure mainly consisted ofcapitalised development expenditure (US$35.8 million), including US$4.7 millionrelated to waste development from the Bulyanhulu Upper East project and US$4.8million relating to the Bulyanhulu Deep West project, investment in theBulyanhulu CIL Expansion project (US$10.1 million), investments in tailings andinfrastructure (US$7.2 million) and component costs (US$3.8 million). Mine Site Review Bulyanhulu Key statistics Three months Six months ended ended 30 June 30 June (Unaudited) 2014 2013 2014 2013 Underground ore tonnes hoisted Kt 217 246 428 418 Ore milled Kt 205 243 425 414 Head grade g/t 8.3 7.8 8.4 7.7 Mill recovery % 91.5% 90.7% 91.6% 91.0% Ounces produced oz 50,241* 54,938 105,420* 92,974 Ounces sold oz 52,044 54,386 101,165 87,802 Cash cost per tonne milled US$/t 233 210 206 219 Cash cost per ounce sold US$/oz 919 936 867 1,033 AISC per ounce sold US$/oz 1,348 1,375 1,249 1,581 Copper production Klbs 1,135 1,382 2,431 2,238 Copper sold Klbs 1,153 1,167 2,347 2,035 Breakdown of Capital Expenditure - Sustaining capital US$('000) 2,334 7,953 4,482 15,546 - Capitalised development US$('000) 17,158 11,822 28,414 24,102 - Expansionary capital US$('000) 10,972 29,678 25,831 52,421 Capital expenditure 30,464 49,453 58,727 92,069 - Non-cash reclamation assetadjustments US$('000) 3,056 (6,843) 8,721 (9,208) Total capital expenditure US$('000) 33,520 42,610 67,448 82,861 * Includes 273 ounces of gold in circuit at the CIL Expansion Plant Operating performance Gold production of 50,241 ounces for the quarter was 9% lower than in Q2 2013,in spite of the 6% increase in grade driven by an increase in the availabilityof high grade stopes. Tonnes hoisted and throughput were both impacted by thedisruption of mining operations for approximately two weeks in May as a resultof the search for a missing underground employee who was subsequently founddeceased as a result of a non-operational incident. Gold ounces sold of 52,044ounces were 4% below that in Q2 2013 primarily due to the lower productionbase, but exceeded production for the quarter due to the sale of concentrateounces on hand at the end of Q1 2014. Copper production of 1.1 million pounds for the quarter was 18% lower than inQ2 2013 due to lower throughput. Cash costs for the quarter of US$919 per ounce sold were 2% lower than theprior year of US$936, although they increased over Q1 2014 as a result of thelower production base and an increase in operating expenses to support the rampup of production in the second half of the year. Against the prior year period,cash costs were positively impacted by lower general and administration costsprimarily driven by lower freight costs, aviation charges, corporate chargesand consumable costs. AISC per ounce sold for the quarter of US$1,348 was 2% lower than in Q2 2013(US$1,375), but higher than Q1 2014 as a result of lower production, highercash costs and higher capitalised development costs as explained below. During the quarter, we progressed the commissioning of the new CIL circuit atBulyanhulu and are nearing the completion of the commissioning stage. In lateJune, roughly 6,500 tonnes of rougher tails were treated and pumped into thenew CIL circuit, resulting in 273 ounces of gold being produced in circuit. Weexpect commissioning of this project to be complete early in Q3 with the firstgold pour in August. The ramp up of production will continue throughout thethird quarter. We continue to expect production of 20,000 ounces in 2014 fromthe project, and are investigating an option for accelerating the retreatmentof the historic higher grade tailings in preference to the rougher tailings. We undertook waste development in the Upper East Zone for a capital cost ofUS$4.7 million in Q2 2014 and will commence ore development as expected in Q32014. As a result, we expect production from the Upper East Zone ofapproximately 15,000 ounces of gold in H2 2014, weighted towards the fourthquarter. In addition, we have progressed the development of the Deep West Zonethrough a contractor to accelerate access to higher grade ore from Q4 2014, andhave incurred underground development capital costs of US$4.8 million duringthe quarter. ABG expects that the combined capital requirements the Upper EastZone and Deep West Zone for 2014 will be approximately US$30 million. This iscategorised as capitalised development and is included in the Bulyanhulu andGroup AISC figures. Capital expenditure for the quarter of US$30.5 million was 38% lower than in Q22013 of US$49.5 million. Capital expenditure consisted mainly of capitalisedunderground development costs (US$17.2 million, inclusive of US$4.7 million ofUpper East and US$4.8 million of Deep West spend) and expansionary capitalinvestment relating to the CIL circuit (US$10.1 million). Buzwagi Key statistics Three months Six months ended ended 30 June 30 June (Unaudited) 2014 2013 2014 2013 Tonnes mined Kt 5,803 8,475 11,346 17,305 Ore tonnes mined Kt 1,333 800 2,354 1,501 Ore milled Kt 1,010 1,197 1,980 2,290 Head grade g/t 1.9 1.4 1.8 1.3 Mill recovery % 91.9% 87.3% 90.3% 88.2% Ounces produced oz 57,787 45,726 102,344 85,746 Ounces sold oz 49,479 44,556 92,442 96,367 Cash cost per tonne milled US$/t 41 39 41 39 Cash cost per ounce sold US$/oz 837 1,054 879 918 AISC per ounce sold US$/oz 1,078 1,632 1,169 1,643 Copper production Klbs 2,318 1,740 3,999 3,346 Copper sold Klbs 1,721 1,589 3,044 4,078 Breakdown of Capital Expenditure - Sustaining capital US$('000) 3,915 4,512 5,776 20,657 - Capitalised development US$('000) 5,525 17,426 15,157 41,338 Capital expenditure 9,440 21,938 20,933 61,995 - Non-cash reclamation assetadjustments US$('000) 174 (5,770) 839 (6,809) Total capital expenditure US$('000) 9,614 16,168 21,772 55,186 Operating performance Gold production for the quarter of 57,787 ounces was 26% higher than in Q22013, driven by increased head grade as a result of the re-engineered mine planas communicated in 2013. Gold sold for the quarter amounted to 49,479 ounces,11% above that of Q2 2013 due to the increased production base, but laggingproduction as a result of the availability and timing of copper concentrateshipments. We anticipate that the majority of the unsold ounces at the end ofJune will be shipped during Q3 2014 with the remainder sold in Q4 2014. Tonnes milled during the quarter were 16% lower than in Q2 2013 due to lowermill availability as a result of the re-lining of both the SAG and Ball millsin May, coupled with the limiting of daily throughput to manage a defective SAGmill gearbox ahead of a change out in early Q3. The management of the SAG millgearbox meant that the process plant ran on 100% diesel power to ensureconsistent power supply from May, although this has now reverted back to thenormal power mix. Total tonnes mined for the quarter of 5.8 million tonnes were 32% lower than inQ2 2013 due to changes in the mine plan compared to 2013 due to the focus onthe removal of less waste and mining of higher grade areas. Copper production of 2.3 million pounds for the quarter was 33% higher than inQ2 2013 driven by the increased copper grades and concentrate production. Cash costs for the quarter of US$837 per ounce sold were 21% lower than in Q22013 (US$1,054). Cash costs were positively impacted by increased productionlevels and resultant co-product revenue, together with savings driven by theOperational Review in contracted services (lower rates) and labour costs (58%reduction in the international workforce). This was partially offset by lowercapitalised development costs, increased power costs to run the process planton self generated power, and increased maintenance costs due to increasedmaintenance activity. AISC per ounce sold for the quarter of US$1,078 was 34% lower than in Q2 2013(US$1,632). This was driven by the lower cash cost base and lower sustainingcapital and capitalised development expenditure. Capital expenditure for the quarter of US$9.4 million was 57% lower than in Q22013 (US$21.9 million). The significant change to the mine plan reduced thelevels of waste movement thereby reducing capitalised stripping costs. Keycapital expenditure for the quarter included capitalised stripping costs(US$5.5 million), investments in tailings and infrastructure (US$2.1 million)and component change out costs (US$1.2 million). North Mara Key statistics Three months Six months ended ended 30 June 30 June (Unaudited) 2014 2013 2014 2013 Tonnes mined Kt 4,335 6,420 8,118 11,395 Ore tonnes mined Kt 566 681 1,126 1,458 Ore milled Kt 710 634 1,365 1,280 Head grade g/t 3.5 3.6 3.6 3.6 Mill recovery % 86.9% 87.0% 87.3% 87.1% Ounces produced oz 70,177 63,774 138,816 128,478 Ounces sold oz 70,040 71,150 137,340 130,200 Cash cost per tonne milled US$/t 55 77 59 75 Cash cost per ounce sold US$/oz 561 684 584 739 AISC per ounce sold US$/oz 893 1,266 936 1,313 Breakdown of Capital Expenditure - Sustaining capital US$('000) 4,557 9,183 8,088 23,962 - Capitalised development US$('000) 13,125 22,271 25,392 28,917 - Expansionary capital US$('000) 978 376 978 504 Capital expenditure 18,660 31,830 34,458 53,383 - Non-cash reclamation assetadjustments US$('000) 1,382 (4,442) 5,358 (5,950) Total capital expenditure US$('000) 20,042 27,388 39,816 47,433 Operating performance Production for the quarter of 70,177 ounces was 10% higher than in Q2 2013despite the marginally lower head grade as throughput rates exceeded the prioryear period by 12%. The higher milled tonnes were due to improved millefficiency. Gold ounces sold for the quarter of 70,040 ounces were in line withproduction. Cash costs for the quarter of US$561 per ounce sold were 18% lower than in Q22013 (US$684). Cash costs were positively impacted by increased productionlevels, together with a 36% reduction in the international workforce and lowermaintenance costs, both a result of initiatives driven by the OperationalReview. This was partially offset by lower capitalised mining costs and highercontracted services costs given increased drilling rates and activity. AISC per ounce sold for the quarter of US$893 was 29% lower than in Q2 2013(US$1,266) due to the reasons outlined above, combined with lower sustainingcapital and capitalised development expenditure in combination with theincreased production base. During the second half of the year, North Mara is expected to mill an increasednumber of ore tonnes sourced from the lower grade Nyabirama pit rather thanfrom the Gokona pit. As a result head grades for the full year are expected torevert towards the reserve grade of the mine. The feasibility study into the potential to mine Gokona Cut 3 via anunderground operation continued to progress well during the quarter and is ontrack to be presented to the Board for approval in Q4 2014. During Q2, ABG madethe final decision on the location of the exploration portal which will providethe opportunity to develop a better understanding of the ore body, initialaccess to ore and drilling access to the deeper extensions of the ore body.Early works towards the construction of the portal are in progress with thefirst blast due in August. The total expansionary capital cost of the portalis expected to be around US$10 million. Capital expenditure for the quarter of US$18.7 million was 41% lower than in Q22013 (US$31.8 million), due to lower capitalised development and lowersustaining capital expenditure, slightly offset by increased expansionaryexpenditure. Key capital expenditure included capitalised stripping costs(US$13.1 million), investments in tailings and infrastructure (US$1.8 million)and component costs (US$2.1 million). Expansion capital of US$1.0 millionrelates to exploration drilling costs relating to the Gokona Undergroundfeasibility study. Exploration Review Exploration during H1 2014 continued to focus on the Tanzanian near-mine andin-mine brownfield programmes and the West Kenya Joint Venture Greenfieldprogrammes. Exploration expenditure for the first half of the year wasapproximately US$10.6 million and the full year forecast budget remains US$16.0million. The 2014 exploration programmes have been weighted toward H1 2014,with large diamond core programmes from surface and underground platforms atBulyanhulu, and extensive soil sampling, ground geophysics and Aircore drillingprogrammes across the West Kenya Joint Venture. In H2 2014, we expect to complete surface drilling on Bulyanhulu Deep West andAircore drilling in Kenya. We will assess the results of H1 2014 programmes anddesign follow-up programmes to test positive results. The next phase ofunderground drilling at Bulyanhulu, which is targeting the deep westernextension of Reef 2, commenced in early July. Bulyanhulu Deep West Surface Drilling Throughout H1 2014, we have continued a programme of deep diamond drilling Westof the Bulyanhulu mine, targeting extensions of the Reef 1 and Reef 2 veinseries. The holes are designed to test the extensions of the Reef 1 structurefrom 400 metres to 1,200 metres west of the current Bulyanhulu resource wherehistoric drilling had shown indications of further gold mineralisation.Additionally, holes will also intersect the Reef 2 vein series, and provide anindication of whether the Reef 2 system is mineralised up to 2 kilometres westof currently delineated underground resources. During H1 2014, a total of 7,503 metres of diamond core has been drilled fromthe surface holes. The Reef 1 and Reef 2 system has been intersected in severalholes during H1 2014, with better results being returned from Reef 2 in thispart of the Bulyanhulu mineralised system. Encouraging results from theprogramme to date include the following significant intersections: BGMDD0054: 2.0m @10.7g/t Au from 1,174m - Reef 2 series BGMDD0054: 0.5m @ 37.9g/t Au from 1,335m - Reef 2 series BGMDD0054: 0.5m @ 29.6g/t Au from 1,390m - Reef 2 series BGMDD0054W1: 1.29m @ 11.7g/t Au from 1,435m - Reef 1 BGMDD0054W2: 1.02m @ 24.2g/t Au from 1,034m - Reef 2 series BGMDD0054W2: 4.50m @ 8.05g/t Au from 1,640m, includes 1.0m @ 23.8g/t Au - Reef 1 BGMDD0054W3: 1.1m @ 5.35g/t Au from 1,363m - Reef 2 series BGMDD0054W3: 1.20m @ 11.5g/t Au from 1,367m - Reef 2 series BGMDD0055W1: 0.6m @ 18.8g/t Au from 613m - Reef 2 series BGMDD0055W2: 0.80m @ 16.2g/t Au from 944m - Reef 2 series BGMDD0055W3: 0.79m @ 7.00g/t Au from 1,059m - Reef 1 BGMDD0056W1: 0.50m @ 94.6g/t Au from 805m - Reef 2 series The results from these holes are potentially significant in demonstrating thatgold mineralisation, particularly on the Reef 2 vein system continues West ofthe mine, which would open the potential for an expansion of the footprint ofBulyanhulu on Reef 2. The drilling programme is expected to be completed duringH2 2014 with a single rig drilling a further 2,500 metres of diamond coredrilling. This programme will form an important part of our assessment of howto most effectively develop the Bulyanhulu mine over the long term. Bulyanhulu East Deeps Underground Drilling - Reef 2 The East Deeps drilling programme targeted down dip mineralisation of theBulyanhulu Reef 2 system which is outside the current resource model. Theprogramme was drilled from several underground drill platforms and was aimed atadding high grade gold resources on the East Zone. Drilling was completedduring H1 2014 with a total of 3,058 metres of diamond core completed fromthree holes, bringing the total for the programme to five holes at 5,598metres. The results received were all from the Reef 2 series and included thefollowing encouraging intersections: UX4700-405: 1.0m @ 19.0g/t Au UX4700-407: 1.3m @ 76.7g/t Au UX4700-408: 1.75m @ 13.6g/t Au UX4700-410: 0.5m @ 18.4g/t Au These intersections continue to prove continuity at depth of the mineralisationwith high grade. This has the potential to add to the mine resource in thisarea, with the high grade shoot remaining open at depth. This stage of theprogramme has been completed and the results will be incorporated into the endof year resource calculations. Further drilling programmes are planned in thisarea and will be completed as part of a larger Reef 2 underground resourceexpansion programme being undertaken by the mine over the next few years. West Kenya Joint Venture Projects Aircore drilling testing existing gold-in-soil anomalies along the LirandaCorridor on the south side of the Kakamega Dome continued throughout H1 2014,with a total of 830 holes completed for 32,215 metres. The Aircore programmehas been very successful, with 247 holes of the 992 holes completed since theprogramme commenced in 2013 returning anomalous results (>0.1g/t Au), of which87 holes intersecting zones of >0.50g/t Au including better results during H12014 of: KDAC0312: 3m @ 15.2 g/t Au from 41m and 9m @ 1.71 g/t Au from 62m KDAC0361: 39.5m @ 0.81 g/t Au from 9m, including 6m @ 2.26 g/t Au KDAC0376: 9m @ 2.57 g/t Au from 57m KDAC0617: 6m @ 7.7 g/t Au incl. 3m @ 13.7 g/t Au KDAC0832: 12m @ 2.77 g/t Au incl. 3m @ 9.11 g/t Au KDAC0841: 15m @ 1.94 g/t Au and 6m @ 4.35 g/t Au KDAC0858: 6m @ 22.3 g/t Au incl. 3m @ 44 g/t Au KDAC0860: 27m @ 1.31 g/t Au incl. 15m @ 2.16g/t Au KDAC0877: 12m @ 12.6g/t Au incl. 3m @ 46.3 g/t Au The gold mineralisation has been intersected in a variety of rock types alongthe Liranda Corridor, which indicates opportunities to test for different typesand styles of gold deposits in this area. The majority of gold mineralisationintersected to date has been within weathered (oxidised) bedrock, oftenassociated with quartz veining, but not always the case. The Aircore results to date are very encouraging given the current line spacingof the Aircore traverses varies between 200 metres and 800 metres and theaverage depth of drilling to date is relatively shallow at approximately 50metres. Step-out and infill traverses are being undertaken as part of thecurrent phase of the programme before targets will be ranked for testing bymore advanced reverse circulation and diamond drilling. In tandem with the Aircore drilling we are undertaking gradient and pole-dipoleIP and Resistivity across selected gold-in-soil anomalies throughout the LakeZone Camp in the central and western areas of the project. A total of 147 linekilometres of surveys have now been completed. Ten 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. Financial Review The positive impact of the Operational Review and the challenging gold priceenvironment in 2014 is reflected in the ABG Group's financial results for thesix months ended 30 June 2014 which also present Tulawaka as a discontinuedoperation: Revenue of US$445.5 million was US$41.9 million lower than H1 2013 driven by a13% decrease in the average realised gold price to US$1,290 per ounce sold(US$1,480 per ounce sold in the prior year period), which more than offset anincrease of 16,578 ounces (5%) in sales volumes. Cash costs decreased to US$752 per ounce sold from US$876 in H1 2013, driven byhigher production, lower labour costs and contracted services. All-in sustaining costs decreased to US$1,118 per ounce sold from US$1,483 inH1 2013 due to lower cash costs, sustaining capital expenditures andcapitalised development costs. EBITDA increased by 1% to US$131.6 million, mainly driven by lower directmining costs achieved from the implementation of the Operational Reviewinitiatives. Operational cash flow of US$127.1 million was 28% higher than H1 2013, mainlydue to reduced operating costs and decreased working capital investment. The following review provides a detailed analysis of our consolidated resultsfor the six months ended 30 June 2014 and the main factors affecting financialperformance. It should be read in conjunction with the consolidated interimfinancial information and accompanying notes on pages 27 to 44, which have beenprepared in accordance with International Financial Reporting Standards asadopted for use in the European Union (IFRS). Discontinued operation - Tulawaka On 15 November 2013, ABG announced that an agreement was reached with STAMICO,the Tanzanian State Mining Corporation, whereby STAMICO acquired the TulawakaGold Mine ("Tulawaka") and certain exploration licenses surrounding Tulawakafor a consideration of US$4.5 million and the grant of a 2% net smelter royaltyon future production in excess of 500,000 ounces, capped at US$0.5 million. Aspart of the agreement, STAMICO took ownership and management of therehabilitation fund established as part of the closure plan for the mine, inreturn for the assumption of all remaining past and future closure andrehabilitation liabilities for Tulawaka, and indemnified the other parties tothe agreement in relation to these liabilities. This resulted in a cash paymentby ABG to STAMICO of the balance of the rehabilitation fund, less thetransaction consideration on completion. Tulawaka was 100% owned by theTulawaka Joint Venture, in which ABG held a 70% economic interest through awholly owned subsidiary, and MDN Inc held the remaining 30% of the JointVenture. Production at Tulawaka ceased in Q2 2013. The transaction completed on4 February 2014, resulting in a cash payment of US$11.6 million to STAMICO. The financial results of Tulawaka have been presented as discontinuedoperations in the consolidated interim financial information. The comparativeresults in the consolidated interim income statement have been presented as ifTulawaka had been discontinued from the start of the comparative period,effectively excluding the net result relating to Tulawaka from individualincome statement lines and aggregating it in one line called "Net profit/(loss)from discontinued operations". Below is a reconciliation showing Groupfinancial performance on a line by line basis. Six months ended 30 June 2014 Six months ended 30 June 2013 (US$'000) Continuing Discontinued Continuing Discontinued(Unaudited) operations operations Total operations operations Total Revenue 445,509 - 445,509 487,360 12,392 499,752 Cost of sales (332,474) - (332,474) (386,733) (28,151) (414,884) Gross profit 113,035 - 113,035 100,627 (15,759) 84,868 Corporate administration (13,975) - (13,975) (17,583) (1,301) (18,884) Share based payments (4,917) - (4,917) 3,861 114 3,975 Exploration and evaluation costs (10,995) - (10,995) (7,715) 161 (7,554) Corporate social responsibility expenses (4,307) (92) (4,399) (6,228) (690) (6,918) Impairment charges - - - (910,989) (16,701) (927,690) Other charges (12,782) 958 (11,824) (15,597) (6,496) (22,093) Profit/(loss) before net finance expenseand taxation 66,059 866 66,925 (853,624) (40,672) (894,296) Finance income 630 36 666 995 10 1,005 Finance expense (4,504) (16) (4,520) (4,696) (79) (4,775) Profit/(loss) before taxation 62,185 886 63,071 (857,325) (40,741) (898,066) Tax (expense)/credit (22,716) - (22,716) 184,648 - 184,648 Net profit/(loss) for the period 39,469 886 40,355 (672,677) (40,741) (713,418) The financial performance below is stated for continuing operations. Revenue Revenue for H1 2014 of US$445.5 million was 9% lower than in H1 2013 (US$487.4million). Year-on-year realised gold prices decreased by 13% to US$1,290 perounce sold from US$1,480 in H1 2013, which more than offset the increase insales volumes of 16,578 ounces. The increase in sales ounces was primarily dueto the higher production base. Included in total revenue was co-product revenue of US$18.7 million for H12014, which decreased by 17% from the prior year period (US$22.7 million) dueto the lower copper sales volumes and a lower realised copper price. The H12014 average realised copper price of US$3.07 per pound compared unfavourablyto that of H1 2013 (US$3.23 per pound), and was driven by global market factorsregarding supply and demand. Cost of sales Cost of sales was US$332.5 million for H1 2014, representing a decrease of 14%on the prior year period (US$386.7 million). The key aspects impacting the costof sales for the reporting period were lower direct mining costs as a result ofOperational Review savings across labour, consumables and freight, a change ininventory credit driven by the investment in ore inventory and build up ofounces on hand and lower depreciation and amortisation charges driven by thelower capital base employed. The table below provides a breakdown of cost of sales: Three months ended Six months ended 30(US$'000) 30 June June (Unaudited) 2014 2013 2014 2013 Cost of Sales Direct mining costs 122,841 141,623 238,087 268,238 Third party smelting and refining fees 5,783 3,611 9,916 7,997 Royalty expense 10,011 10,845 19,775 21,831 Depreciation and amortisation 34,698 47,269 64,696 88,667 Total 173,333 203,348 332,474 386,733 A detailed breakdown of direct mining expenses is shown in the table below: Three months ended 30 Six months ended 30(US$'000) June June (Unaudited) 2014 2013 2014 2013 Direct mining costs Labour 32,976 39,040 67,973 80,440 Energy and fuel 33,926 35,932 66,345 70,228 Consumables 24,850 28,148 48,723 54,796 Maintenance 24,907 23,142 47,923 47,741 Contracted services 23,549 23,583 42,300 50,030 General administration costs 19,522 24,103 39,591 45,808 Capitalised mining costs (36,889) (32,325) (74,768) (80,805) Total direct mining costs 122,841 141,623 238,087 268,238 Direct mining costs of US$238.1 million for H1 2014 were 11% lower than H1 2013(US$268.2 million). Individual cost components comprised: A 15% reduction in labour costs, mainly as a result of the lower headcount atall operating sites, specifically a 29% reduction in group internationalemployees, driven by localisation efforts and the impact of the OperationalReview. A 6% reduction in energy and fuel expenses, driven primarily by lower dieselusage at North Mara as a result of reduced mining activity, and at Buzwagi as aresult of reduced mining and processing activity. An 11% decrease in consumable costs, primarily due to supplier pricenegotiations, increased mine site efficiencies and lower mining activity. Maintenance costs of US$47.9 million were in line with prior year costs ofUS$47.7 million. A 15% decrease in contracted services, mainly driven by lower mining activityat Buzwagi, and the renegotiated maintenance rates associated with maintenanceand repair contracts ("MARC") contracts at Buzwagi and North Mara. A 14% decrease in general administration costs, mainly at Bulyanhulu and NorthMara driven by lower freight costs associated with inventory consumed, adecrease in the stock obsolescence provision and lower aviation charter costsdriven by the Operational Review. Capitalised direct mining costs, consisting of capitalised development costsand the change in inventory charge, is comprised as follows: Three months ended 30(US$'000) June Six months ended 30 June (Unaudited) 2014 2013 2014 2013 Capitalised direct mining costs Capitalised development costs (30,649) (52,298) (64,095) (95,775) (Investment in)/ drawdown of inventory (6,240) 19,973 (10,673) 14,970 Total capitalised direct mining costs (36,889) (32,325) (74,768) (80,805) Capitalised development costs were 33% lower than H1 2013, driven by increasedfocus on mining ore at Buzwagi due to the revised mine plan. The investment ininventory was US$25.6 million higher than in H1 2013 due to a build up of oreinventory at Buzwagi due to lower throughput rates combined with increased goldinventory on hand driven by the timing of production compared to sales. Thiswas slightly offset by a drawdown of ore stockpiles at North Mara as a resultof the improved throughput rate and plant performance. Corporate administration costs Corporate administration expenses totalled US$18.9 million for H1 2014. AUS$3.6 million decrease in general corporate administration costs due to theimpact of the Operational Review was more than offset by an increase of US$8.8million in share based payment expenses given the stronger share priceperformance. This resulted in a 38% increase on H1 2013 (US$13.7 million) asshown in the table below. Three months ended 30 Six months ended 30 June June (US$'000) 2014 2013 2014 2013 (Unaudited) Corporate administration 7,618 9,169 13,975 17,583 Share based payments 1,593 (425) 4,917 (3,861) Total corporate administration 9,211 8,744 18,892 13,722 Exploration and evaluation costs Exploration and evaluation costs of US$11.0 million were incurred in H1 2014,43% higher than the US$7.7 million spent in H1 2013. The key focus areas for H12014 were drilling at Bulyanhulu deep central reefs 1 and 2 (US$5.5 million),and exploration programmes at the West Kenya Joint Venture project amounting toUS$3.3 million. The Bulyanhulu underground programme has been completed in H12014 and the second half of the year should see decreased field activity acrossall projects. Corporate social responsibility expenses Corporate social responsibility costs incurred amounted to US$4.3 million forthe six months compared to the prior year of US$6.2 million. The main projectsfor H1 2014 related to Village Benefit Implementation Agreements ("VBIAs") atNorth Mara and contributions to general community projects funded from the ABGMaendeleo Fund. Other charges Other charges amounted to US$12.8 million, 18% lower than H1 2013 (US$15.6million). The main contributors were: (i) non-cash foreign exchange lossesmainly related to the indirect tax receivables due to the weakening of theTanzanian shilling (US$7.8 million), (ii) Operational Review costs, includingexternal services and retrenchment costs of US$5.3 million, (iii) legal costsof US$1.9 million, and (iv) ABG's entry into zero cost collar contracts as partof a programme to protect it against copper, silver, rand and fuel cost marketvolatility. The entry into these arrangements resulted in a combinedmark-to-market revaluation gain of US$2.7 million, due to the fact that thesearrangements do not qualify for hedge accounting. Refer to note 7 of theconsolidated interim financial information for further details. Finance expense and income Finance expense of US$4.5 million for H1 2014 was 4% lower than H1 2013 (US$4.7million). The key drivers were US$1.2 million (US$1.5 million in 2013) relatingto the servicing of the US$150 million undrawn revolving credit facility, andaccretion expenses relating to the discounting of the environmental reclamationliability (US$2.5 million). Other costs include bank charges and interest onfinance leases. Interest costs relating to the project financing on the CILBulyanhulu Expansion project are capitalised to the cost of the asset due tothe facility being directly attributable to the asset. For the six months ended30 June 2014 US$2.0 million of borrowing costs have been capitalised to theproject. Finance income relates predominantly to interest charged on non-currentreceivables and interest received on money market funds. Refer to note 8 of theconsolidated interim financial information for details. Taxation matters The taxation charge was US$22.7 million for H1 2014, compared to a credit ofUS$184.6 million in H1 2013. The tax charge was made up solely of deferred taxcharges and reflects the impact of the profitability on a year-to-date basis.The effective tax rate in H1 2014 amounted to 36.5% compared to 21.5% in H12013. The increase is mainly driven by the increase in taxable income, andtemporary higher tax losses for corporate and exploration entities in Q2 2014for which deferred tax assets are not recognised. This is expected to normalisein H2 2014. Net earnings from continuing operations As a result of the factors discussed above, net profit from continuingoperations for H1 2014 was US$39.5 million, against the prior year period lossof US$672.7 million. Lower impairment charges, costs of sales, and othercharges contributed to the variance. This was offset by the higher tax chargeand lower revenue. Earnings per share The earnings per share for H1 2014 amounted to US10.0 cents, an increase ofUS181.0 cents from the prior year period loss of US171.0 cents. The increasewas driven by an increased net profit with no change in the underlying issuedshares. Earnings per share from continuing operations amounted to US9.6 cents. Key financial performance indicators and reconciliations Cash costs Cash cost per ounce sold in H1 2014 (US$752 per ounce sold) decreased by 14%when compared to H1 2013 (US$876 per ounce). Refer to the operating overview onpage 7 and cost of sales explanations as part of the financial review for thedetails on the year on year change. The table below provides a reconciliation between cost of sales and total cashcost to calculate the cash cost per ounce sold. Three months ended Six months ended 30(US$'000) 30 June June (Unaudited) 2014 2013 2014 2013 Total cost of sales 173,333 203,348 332,474 386,733 Deduct: depreciation and amortisation (34,698) (47,269) (64,696) (88,667) Deduct: Co-product revenue (10,098) (9,544) (18,744) (22,670) Total cash cost 128,537 146,535 249,034 275,396 Total ounces sold 171,563 170,092 330,947 314,369 Cash cost per ounce 749 862 752 876 Discontinued operations - 17 - 27 Attributable cash cost per ounce 749 879 752 903 Refer to note 6 to the consolidated interim financial information for areconciliation to all-in sustaining cost per ounce sold. EBITDA EBITDA for H1 2014 increased by 1% to US$131.6 million when compared to H1 2013(US$130.8 million) as a result of the lower cost of sales and other charges,partly offset by lower revenue and higher corporate administration costs. Areconciliation between net profit for the period and EBITDA is presented below: Three months ended 30 Six months ended 30(US$'000) June June (Unaudited) 2014 2013 2014 2013 Net profit/ (loss) for the period 18,412 (729,628) 40,355 (713,418) Plus income tax expense 12,047 (198,907) 22,716 (184,648) Plus depreciation and amortisation 34,698 47,865 64,696 97,377 Plus impairment charges/write-offs - 927,690 - 927,690 Plus finance expense 2,106 2,218 4,520 4,775 Less finance income (304) (410) (666) (1,005) EBITDA 66,959 48,828 131,621 130,771 Financial position ABG had cash and cash equivalents on hand of US$269.6 million as at 30 June2014 (US$320.9 million as at 30 June 2013). The Group's cash and cashequivalents are with counterparties whom the Group considers to have anappropriate credit rating. Location of credit risk is determined by physicallocation of the bank branch or counterparty. Investments are held mainly inUnited States dollars and cash and cash equivalents in other foreign currenciesare maintained for operational requirements. During 2013, a US$142 million facility was put in place to fund the bulk of thecosts of the construction of one of our key growth projects, the Bulyanhulu CILExpansion project ("Project"). The Facility is collateralised by the Project,and has a term of seven years with a spread over Libor of 250 basis points. Theseven year Facility is repayable in equal instalments over the term of theFacility, after a two year repayment holiday period. The interest rate has beenfixed at 3.6% through the use of an interest rate swap. The full facility ofUS$142 million was drawn in 2013. The above compliments the existing undrawn revolving credit facility of US$150million which runs until November 2016. The net book value of property, plant and equipment increased from US$1.28billion in December 2013 to US$1.35 billion in June 2014. The main capitalexpenditure drivers have been explained in the cash flow used in the investingactivities section below, and have been offset by depreciation charges ofUS$64.7 million. Refer to notes 6 and 12 to the consolidated interim financialinformation for further details. Total indirect tax receivables, net of a discount provision applied to thenon-current portion, decreased from US$159.8 million as at 31 December 2013 toUS$126.6 million as at 30 June 2014. The decrease was mainly due to refunds ofUS$65.8 million received during H1 2014, which was offset by a net increase incurrent VAT receivables of approximately US$37 million. The net deferred taxposition decreased from an asset of US$14.9 million as at 31 December 2013 to aliability of US$7.8 million. This was mainly driven by the reduction indeferred tax assets as a result of the company making taxable income. Net assets attributable to owners of the parent increased from US$1.93 billionin December 2013 to US$1.96 billion in June 2014. The increase reflects thecurrent year profit attributable to owners of the parent of US$40.8 million andthe payment of the final 2013 dividend of US$8.2 million to shareholders duringH1 2014. Cash flow generation and capital management Cash flow - continuing and discontinued operations For the three months ended 30 For six months(US$'000) June ended 30 June (Unaudited) 2014 2013 2014 2013 Cash generated from operating activities 76,381 41,691 127,107 99,017 Cash used in investing activities (50,541) (102,943) (128,074) (208,822) Cash (used in)/provided by financing activities (10,249) (20,263) (11,085) 27,588 Increase/(decrease) in cash 15,591 (81,515) (12,052) (82,217) Foreign exchange difference on cash (89) 868 (761) 1,742 Opening cash balance 254,094 401,520 282,409 401,348 Closing cash balance 269,596 320,873 269,596 320,873 Cash flow from operating activities was US$127.1 million for H1 2014, anincrease of US$28.1 million, when compared to H1 2013 (US$99.0 million). Theincrease primarily relates increased EBITDA, slightly offset by an investmentin working capital. The working capital investment of US$3.8 million relatedmainly to a decrease in trade payables of US$16.4 million due to the timing ofpayments combined with an investment in gold inventory of US$14.6 million. Thiswas offset by VAT refunds of US$28.2 million received from the TanzanianGovernment. Cash flow used in investing activities was US$128.1 million for H1 2014, adecrease of 39% when compared to H1 2013 (US$208.8 million), driven by lowersustaining capital expenditure across all sites, lower expansion capitalexpenditure mainly related to the Bulyanhulu CIL Expansion project and lowercapitalised development expenditure at Buzwagi and North Mara. A breakdown of total capital and other investing capital activities for the sixmonths ended 30 June is provided below: (US$'000) For six months ended 30 June (Unaudited) 2014 2013 Sustaining capital 20,724 58,987 Expansionary capital 26,809 53,866 Capitalised development 68,963 94,357 Total cash capital 116,496 207,210 Non-cash rehabilitation asset adjustment 14,918 (22,128) Non-cash sustaining capital1 (1,752) 1,846 Total capital expenditure 129,662 186,928 Other investing capital - Non-current asset movement2 (55) 1,612 -Cash flow related to the sale of Tulawaka 11,633 - 1 Total non-cash sustaining capital relates to the impact of capital accrualsexcluded from cash sustaining capital. 2 Non-current asset movements relates to the investment in the landacquisitions reflected as prepaid operating leases and Tanzania governmentreceivables. Sustaining capital Sustaining capital expenditure included the investment in mine equipment ofUS$6.7 million, mainly relating to component change outs at North Mara andBuzwagi and investment in tailings and infrastructure at North Mara (US$3.4million), Bulyanhulu (US$3.2 million), and Buzwagi (US$3.0 million). Expansionary capital Expansionary capital expenditure consisted mainly of the Bulyanhulu CILExpansion project (US$24.9 million). Capitalised development Capitalised development capital includes capitalised stripping for North Mara(US$25.4 million) and Buzwagi (US$15.2 million) and Bulyanhulu capitalisedunderground development of US$28.4 million. Non-cash capital Non-cash capital was US$13.2 million and consisted of reclamation assetadjustments (US$14.9 million) and the six months increase in capital accruals(US$1.8 million). The reclamation adjustments were driven by lower US risk freerates driving lower discount rates. Other investing capital The sale of Tulawaka to STAMICO resulted in a cash payment of the balance ofthe rehabilitation fund, less the transaction consideration on completion, andamounted to US$11.6 million. During H1 2014 North Mara incurred land purchasestotalling US$5.3 million. Cash flow used in financing activities for the six months ended 30 June 2014was US$11.1 million, a decrease of US$38.7 million on H1 2014 (US$27.6 millioninflow). The outflow primarily relates to payment of the final 2013 dividend ofUS$8.2 million and finance lease payments of US$2.9 million. Dividend The final dividend for 2013 of US2.0 cents per share was paid to shareholdersduring May 2014. The Board of Directors have approved an interim dividend for2014 of US1.4 cents per share, payable to shareholders in September 2014. Significant judgements in applying accounting policies and key sources ofestimation uncertainty Many of the amounts included in the consolidated interim financial statementsrequire management to make judgements and/or estimates. These judgements andestimates are continuously evaluated and are based on management's experienceand best knowledge of the relevant facts and circumstances, but actual resultsmay differ from the amounts included in the consolidated financial informationincluded in this release. Information about such judgements and estimation isincluded in the accounting policies and/or notes to the consolidated interimfinancial statements, and the key areas are summarised below. Areas of judgement and key sources of estimation uncertainty that have the mostsignificant effect on the amounts recognised in the consolidated interimfinancial statements include: Estimates of the quantities of proven and probable gold reserves; The capitalisation of production stripping costs; The capitalisation of exploration and evaluation expenditures; Review of goodwill, tangible and intangible assets' carrying value, thedetermination of whether these assets are impaired and the measurement ofimpairment charges or reversals; The estimated fair values of cash generating units for impairment tests,including estimates of future costs to produce proven and probable reserves,future commodity prices, foreign exchange rates and discount rates; The estimated useful lives of tangible and long-lived assets and themeasurement of depreciation expense; Property, plant and equipment held under finance leases; Recognition of a provision for environmental rehabilitation and the estimationof the rehabilitation costs and timing of expenditure; Whether to recognise a liability for loss contingencies and the amount of anysuch provision; Whether to recognise a provision for accounts receivable and the impact ofdiscounting the non-current element; Recognition of deferred income tax assets, amounts recorded for uncertain taxpositions, the measurement of income tax expense and indirect taxes; Determination of the cost incurred in the productive process of ore stockpiles,gold in process, gold doré/bullion and concentrate, as well as the associatednet realisable value and the split between the long term and short termportions; Determination of fair value of derivative instruments; and Determination of fair value of stock options and cash-settled share basedpayments. Going concern statement The ABG Group's business activities, together with factors likely to affect itsfuture development, performance and position are set out in the operational andfinancial review sections of this report. The financial position of the ABGGroup, its cash flows, liquidity position and borrowing facilities aredescribed in the preceding paragraphs of this financial review. At 30 June 2014, the Group had cash and cash equivalents of US$269.6 millionwith a further US$150 million available under the undrawn revolving creditfacility which has been further extended until November 2016. Total borrowingsat the end of the year amounted to US$142 million, of which the first repaymentis only repayable from 2015. Included in other receivables are amounts due to the Group relating to indirecttaxes of US$66.0 million which are expected to be received within 12 months,but these will be offset to an extent by new claims submitted for input taxesincurred during 2014. The refunds remain dependent on processing and paymentsof refunds by the Government of Tanzania. We expect that the above, in combination with the expected operational cashflow generated during the year, will be sufficient to cover the capitalrequirements and other commitments for the foreseeable future. In assessing the ABG Group's going concern status the Directors have taken intoaccount the above factors, including the financial position of the ABG Groupand in particular its significant cash position, the current gold and copperprice and market expectations for the same in the medium term, and the ABGGroup's capital expenditure and financing plans. After making appropriateenquiries, the Directors consider that ABG and the ABG Group as a whole hasadequate resources to continue in operational existence for the foreseeablefuture and that it is appropriate to adopt the going concern basis in preparingthe consolidated interim financial statements. 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.Refer to page 15 for a reconciliation to cost of sales. 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 June 2014 Three months ended 30 June 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 919 561 837 749 936 684 1,054 862 Corporate administration 40 36 39 45 61 35 57 54 Share based payments 2 - (4) 9 - (1) - (3) Rehabilitation 8 19 6 12 7 31 24 21 Mine exploration 2 2 1 2 3 16 2 8 CSR expenses 2 12 9 11 5 26 3 18 Capitalised development 330 187 112 209 217 313 391 303 Sustaining capital 45 76 78 68 146 162 101 141 Total continuing operations 1,348 893 1,078 1,105 1,375 1,266 1,632 1,404 Discontinued operations 0 12 Total 1,105 1,416 (Unaudited) Six months ended 30 June 2014 Six months ended 30 June 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 867 584 879 752 1,033 739 918 876 Corporate administration 41 34 38 42 81 40 55 56 Share based payments 2 1 4 15 (1) (1) (1) (12) Rehabilitation 7 19 7 12 8 34 21 23 Mine exploration 2 1 1 2 4 16 3 8 CSR expenses 4 15 14 13 5 29 4 20 Capitalised development 281 185 164 208 274 222 429 300 Sustaining capital 45 97 62 74 177 234 214 212 Total continuing operations 1,249 936 1,169 1,118 1,581 1,313 1,643 1,483 Discontinued operations 0 24 Total 1,118 1,507 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 costs per tonne milled are 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. Risk Review We have made a number of further developments in the identification andmanagement of our risk profile over the course of H1 2014 and whereappropriate, risk ratings have been reviewed against risk management controlsand other mitigating factors. Our principal risks continue to fall within fourbroad categories: strategic risks, financial risks, external risks andoperational risks and, while the overall makeup of our principal risks has notsignificantly changed from that published in the 2013 Annual Report, there havebeen changes in certain risk profiles as a result of developments in ouroperating environment, in particular enhancements made to operating andplanning practices, and continuing uncertainties and trends within the widerglobal economy and/or the mining industry. This has resulted in the followingrisks being removed from those risks previously viewed as principal risks toABG and its operations: (i) costs and capital expenditure; (ii) utilitiessupply; (iii) land acquisitions; and (iv) loss of critical processes. Furtherdetails of these risks are provided in the 2013 Annual Report. In conjunctionwith this, we believe it appropriate to add a new risk as a principal risk forthe remainder of 2014, this being safety risks relating to mining operations.This is due to the fact that, despite the significant health, safety and riskmanagement systems that ABG has in place for its underground and surface miningoperations, mining and in particular underground mining is subject to a numberof hazards and risks in the workplace, such as fall of ground relating tounderlying geotechnical risks, potential fires and mobile equipment incidents,such that safety incidents in the workplace may unfortunately occur. As a result of the review outlined above, for the remainder of 2014 we view ourprincipal risks as relating to the following: Single country risk Reserves and resources estimates Commodity prices Political, legal and regulatory developments Taxation reviews Community relations Environmental hazards and rehabilitation Employer, contractor and industrial relations Security, trespass and vandalism Organisational restructuring Safety risks relating to mining operations Further detail as regards the nature of the new safety risks relating to miningoperations is provided above. Further detail as regards all other principalrisks outlined above is provided as part of the 2013 Annual Report. Directors' Responsibility Statement The Directors confirm that, to the best of their knowledge, the consolidatedinterim financial information has been prepared in accordance with IAS 34 asadopted by the European Union. The interim management report includes a fairreview of the information required by Disclosure and Transparency Rule 4.2.7Rand Disclosure and Transparency Rule 4.2.8R, namely: an indication of important events that have occurred during the first sixmonths of the financial year and their impact on the consolidated interimfinancial information, and a description of the principal risks anduncertainties for the remaining six months of the financial year; and material related-party transactions in the first six months of the financialyear and any material changes in the related party transactions described inthe last Annual Report. The Directors of African Barrick Gold plc are listed in the African BarrickGold plc Annual Report for 31 December 2013. A list of current Directors ismaintained on the African Barrick Gold plc website: www.africanbarrickgold.com. On behalf of the Board Brad Gordon, Chief Executive Officer Kelvin Dushnisky, Chairman Auditor's Review Report Independent review report to African Barrick Gold plc Report on the condensed consolidated interim financial statements Our conclusion We have reviewed the consolidated interim financial information, defined below,in the interim financial statements of African Barrick Gold Plc for the sixmonths ended 30 June 2014. Based on our review, nothing has come to ourattention that causes us to believe that the condensed consolidated interimfinancial information are not prepared, in all material respects, in accordancewith International Accounting Standard 34 as adopted by the European Union andthe Disclosure and Transparency Rules of the United Kingdom's Financial ConductAuthority. This conclusion is to be read in the context of what we say in the remainder ofthis report. What we have reviewed The condensed consolidated interim financial information, which are prepared byAfrican Barrick Gold plc, comprise: the consolidated balance sheet as at 30 June 2014; the consolidated income statement and statement of comprehensive income for theperiod then ended; the consolidated statement of cash flows for the period then ended; the consolidated statement of changes in equity for the period then ended; and the explanatory notes to the condensed consolidated interim financialinformation. As disclosed in note 2, the financial reporting framework that has been appliedin the preparation of the full annual financial statements of the group isapplicable law and International Financial Reporting Standards (IFRSs) asadopted by the European Union. The condensed consolidated interim financial information included in thehalf-yearly financial report have been prepared in accordance withInternational Accounting Standard 34, 'Interim Financial Reporting', as adoptedby the European Union and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Conduct Authority. What a review of condensed consolidated financial information involves We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordancewith International Standards on Auditing (UK and Ireland) and, consequently,does not enable us to obtain assurance that we would become aware of allsignificant matters that might be identified in an audit. Accordingly, we donot express an audit opinion. We have read the other information contained in the half-yearly financialreport and considered whether it contains any apparent misstatements ormaterial inconsistencies with the information in the condensed consolidatedinterim financial information. Responsibilities for the condensed consolidated interim financial informationand the review Our responsibilities and those of the directors The half-yearly financial report, including the condensed consolidated interimfinancial information, is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules ofthe United Kingdom's Financial Conduct Authority. Our responsibility is to express to the company a conclusion on the condensedconsolidated interim financial information in the half-yearly financial reportbased on our review. This report, including the conclusion, has been preparedfor and only for the company for the purpose of complying with the Disclosureand Transparency Rules of the Financial Conduct Authority and for no otherpurpose. We do not, in giving this conclusion, accept or assume responsibilityfor any other purpose or to any other person to whom this report is shown orinto whose hands it may come save where expressly agreed by our prior consentin writing. PricewaterhouseCoopers LLPChartered Accountants, London24 July 2014 Notes: The maintenance and integrity of the African Barrick Gold Plc website is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the financialstatements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions. INTERIM FINANCIAL STATEMENTS Consolidated Income Statement For the For the six months ended year ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) Notes 2014 2013 Restated 2013 CONTINUING OPERATIONS Revenue 445,509 487,360 929,004 Cost of sales (332,474) (386,733) (713,806) Gross profit 113,035 100,627 215,198 Corporate administration (18,892) (13,722) (32,157) Exploration and evaluation costs (10,995) (7,715) (16,927) Corporate social responsibility expenses (4,307) (6,228) (12,237) Impairment charges - (910,989) (1,044,310) Other charges 7 (12,782) (15,597) (30,424) Profit/(loss) before net finance expense and taxation 66,059 (853,624) (920,857) Finance income 8 630 995 1,670 Finance expense 8 (4,504) (4,696) (9,552) Profit/(loss) before taxation 62,185 (857,325) (928,739) Tax (expense)/credit 9 (22,716) 184,648 187,959 Net profit/(loss) from continuing operations 39,469 (672,677) (740,780) DISCONTINUED OPERATIONS Net profit/(loss) from discontinued operations 5 886 (40,741) (57,653) Net profit/(loss) for the period 40,355 (713,418) (798,433) Net Profit/(Loss) attributable to: Owners of the parent (net earnings/(loss)) 40,822 (701,230) (781,101) - Continuing operations 39,469 (672,677) (740,780) - Discontinued operations 1,353 (28,553) (40,321) Non-controlling interests - Discontinued operations (467) (12,188) (17,332) Earnings/ (loss) per share: 10.0 (171.0) (190.4) - Basic and diluted earnings/(loss) per share(cents) from continuing operations 10 9.6 (164.0) (180.6) - Basic and diluted earnings/(loss) per share(cents) from discontinued operations 10 0.4 (7.0) (9.8) The notes on pages 32-44 form an integral part of this financial information. Consolidated Statement of Comprehensive Income For the year For the six months ended 31 ended 30 June December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 2013 Net profit/(loss) for the period 40,355 (713,418) (798,433) Other comprehensive income: Items that may be subsequently reclassified to profit or loss: Changes in fair value of cash flow hedges (1,037) 560 1,570 Total comprehensive income/ (loss) for the period 39,318 (712,858) (796,863) Attributed to: - Owners of the parent 39,785 (700,670) (779,531) - Non-controlling interests (467) (12,188) (17,332) The notes on pages 32-44 form an integral part of this financial information. Consolidated Balance Sheet As at As at As at 30 June 30 June 31 December (Unaudited) (Unaudited) (Audited)(US$'000) Notes 2014 2013 2013 ASSETSNon-current assets Goodwill and intangible assets 211,190 211,190 211,190 Property, plant and equipment 12 1,345,587 1,288,114 1,280,671 Deferred tax assets 45,046 49,510 50,787 Non-current portion of inventory 81,561 71,123 72,689 Derivative financial instruments 13 1,823 2,645 3,253 Other assets 132,892 130,251 137,191 1,818,099 1,752,833 1,755,781 Current assets Inventories 253,264 282,471 253,676 Trade and other receivables 24,321 37,193 24,210 Derivative financial instruments 13 1,009 4,936 1,366 Other current assets 87,270 96,354 113,945 Cash and cash equivalents 269,596 320,873 282,409 635,460 741,827 675,606 Assets of disposal group classified as held for sale - - 596 Total assets 2,453,559 2,494,660 2,431,983 EQUITY AND LIABILITIES Share capital and share premium 929,199 929,199 929,199 Other reserves 1,024,816 1,075,515 992,915 Total owners' equity 1,954,015 2,004,714 1,922,114 Non-controlling interests 4,781 10,392 5,248 Total equity 1,958,796 2,015,106 1,927,362 Non-current liabilities Borrowings 14 142,000 80,000 142,000 Deferred tax liabilities 52,841 37,686 35,862 Derivative financial instruments 13 203 1,566 1,207 Provisions 149,075 147,843 132,237 Other non-current liabilities 13,824 17,656 10,101 357,943 284,751 321,407 Current liabilities Trade and other payables 123,920 171,547 147,896 Derivative financial instruments 13 1,869 8,514 5,074 Provisions 991 10,610 1,028 Other current liabilities 10,040 4,132 12,456 136,820 194,803 166,454 Liabilities of disposal group classified as held for sale - - 16,760 Total liabilities 494,763 479,554 504,621 Total equity and liabilities 2,453,559 2,494,660 2,431,983 The notes on pages 32-44 form an integral part of this financial information. Consolidated Statement of Changes in Equity Contributed Cash surplus/ flow Stock Share Share Other hedging option Notes capital premium reserve reserve reserve (US$'000) Balance at 31 December 2012 (Audited) 62,097 867,102 1,368,713 363 3,502 Total comprehensive income/(loss) - - - 560 - Dividends to equity holders of the Company - - - - - Stock option grants and valuation adjustments - - - - 114 Balance at 30 June 2013 (Unaudited) 62,097 867,102 1,368,713 923 3,616 Total comprehensive income/(loss) for the period - - - 1,010 - Dividends to equity holders of the Company - - - - - Stock option grants and valuation adjustments - - - - 362 Balance at 31 December 2013 (Audited) 62,097 867,102 1,368,713 1,933 3,978 Total comprehensive (loss)/income for the period - - - (1,037) - Dividends to equity holders of the Company 12 - - - - - Stock option grants and valuation adjustments - - - - 318 Balance at 30 June 2014 (Unaudited) 62,097 867,102 1,368,713 896 4,296 Retained earnings/ Total Total non- (Accumulated owners' controlling Total Notes losses) equity interests equity (US$'000) Balance at 31 December 2012 (Audited) 453,934 2,755,711 22,580 2,778,291 Total comprehensive income/(loss) (701,230) (700,670) (12,188) (712,858) Dividends to equity holders of the Company (50,441) (50,441) - (50,441) Stock option grants and valuation adjustments - 114 - 114 Balance at 30 June 2013 (Unaudited) (297,737) 2,004,714 10,392 2,015,106 Total comprehensive income/(loss) for the period (79,871) (78,861) (5,144) (84,005) Dividends to equity holders of the Company (4,101) (4,101) - (4,101) Stock option grants and valuation adjustments - 362 - 362 Balance at 31 December 2013 (Audited) (381,709) 1,922,114 5,248 1,927,362 Total comprehensive (loss)/income for the period 40,822 39,785 (467) 39,318 Dividends to equity holders of the Company 12 (8,202) (8,202) - (8,202) Stock option grants and valuation adjustments - 318 - 318 Balance at 30 June 2014 (Unaudited) (349,089) 1,954,015 4,781 1,958,796 The notes on pages 32-44 form an integral part of this financial information. Consolidated Statement of Cash Flows For the year For the six months ended 31 ended 30 June December (Unaudited) (Unaudited) (Audited) (US$'000) Notes 2014 2013 2013 Cash flows from operating activities Net profit/(loss) for the period 40,355 (713,418) (798,433) Adjustments for: Tax expense/(credit) 9 22,716 (184,648) (187,959) Depreciation and amortisation 64,746 90,101 141,159 Finance items 3,855 3,770 7,968 Impairment charges - 927,690 1,061,011 Profit on disposal of property, plant and equipment (4,113) (86) (175) Working capital adjustments (3,785) (25,856) (41,165) Other non-cash items 4,730 3,067 8,181 Cash generated from operations before interest and tax 128,504 100,620 190,587 Finance income 666 1,005 1,700 Finance expenses (2,063) (2,608) (5,172) Income tax paid - - - Net cash generated by operating activities 127,107 99,017 187,115 Cash flows from investing activities Purchase of property, plant and equipment (116,496) (207,210) (373,101) Investments in other assets (83) (2,032) (8,289) Cash flow related to the sale of Tulawaka 5 (11,633) - - Acquisition of subsidiary, net of cash acquired - - (588) Other investing activities 138 420 (4,872) Net cash used in investing activities (128,074) (208,822) (386,850) Cash flows from financing activities Loans received 14 - 80,000 142,000 Dividends paid 11 (8,202) (50,441) (54,541) Finance lease instalments (2,883) (1,971) (5,137) Net cash (used in)/generated by financing activities (11,085) 27,588 82,322 Net decrease in cash and cash equivalents (12,052) (82,217) (117,413) Net foreign exchange difference (761) 1,742 (1,526) Cash and cash equivalents at 1 January 282,409 401,348 401,348 Cash and cash equivalents at period end 269,596 320,873 282,409 The notes on pages 32-44 form an integral part of this financial information. Notes to the Consolidated Interim Financial Information GENERAL INFORMATION African Barrick Gold plc (the "Company") is a public limited company, which islisted on the London Stock Exchange and incorporated and domiciled in the UK.It is registered in England and Wales with registered number 7123187. Theaddress of its registered office is 5th Floor, No.1 Cavendish Place, W1G 0QF,United Kingdom. Barrick Gold Corporation currently owns 63.9 percent of the shares of theCompany and is the ultimate controlling party of the Group. This condensed consolidated interim financial information for the six monthsended 30 June 2014 were approved for issue by the Board of Directors of thecompany on 24 July 2014. The condensed consolidated interim financialinformation does not comprise statutory accounts within the meaning of section434 of the Companies Act 2006. Statutory accounts for the year ended 31December 2013 were approved by the Board of Directors on 11 March 2014 anddelivered to the Registrar of Companies. The report of the auditors' on thoseaccounts was unqualified, did not contain an emphasis of matter paragraph anddid not contain any statement under section 498 of the Companies Act 2006. Thecondensed consolidated interim financial information has been reviewed, notaudited. The Group's primary business is the mining, processing and sale of gold. TheGroup has three operating mines located in Tanzania. The Group also has aportfolio of exploration projects located across Tanzania and Kenya. BASIS OF PREPARATION OF the condensed annual financial statements The condensed consolidated interim financial information for the six monthsended 30 June 2014 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Conduct Authority and with IAS 34, 'InterimFinancial Reporting' as adopted by the European Union. The condensedconsolidated interim financial information should be read in conjunction withthe annual financial statements for the year ended 31 December 2013, which havebeen prepared in accordance with IFRS as adopted by the European Union. The condensed consolidated interim financial information has been preparedunder the historical cost basis, as modified by the revaluation of financialassets and financial liabilities (including derivative instruments) at fairvalue through profit or loss. The financial information is presented in US dollars (US$) and all monetaryresults are rounded to the nearest thousand (US$'000) except when otherwiseindicated. Where a change in the presentational format between the prior period and thecurrent period financial information has been made during the period,comparative figures have been restated accordingly. The followingpresentational changes were made during the current period: Presentation of the results of discontinued operations due to the sale ofTulawaka mine to STAMICO, the Tanzanian State Mining Corporation. Refer to note5 for a discussion of the transaction. The group's activities expose it to a variety of financial risks: market risk(including currency risk, fair value interest rate risk, cash flow interestrate risk and price risk), credit risk and liquidity risk. The condensedinterim financial statements do not include all financial risk managementinformation and disclosures required in the annual financial statements; theyshould be read in conjunction with the group's annual financial statements asat 31 December 2013. There have been no changes in the risk managementdepartment or in any risk management policies since the year end. The impact of the seasonality on operations is not considered as significant onthe condensed consolidated interim financial information. After making enquiries, the Directors have a reasonable expectation that theGroup has adequate resources to continue in operational existence for theforeseeable future. The Group therefore continues to adopt the going concernbasis in preparing the consolidated interim financial information. Refer page22 for the Going Concern statement. ACCOUNTING POLICIES The accounting policies adopted are consistent with those used in the AfricanBarrick Gold plc annual financial statements for the year ended 31 December2013 except as described below. Taxes on income in the interim periods are accrued using the tax rate thatwould be applicable to expected total annual earnings. IFRS 10, 'Consolidated financial statements', IFRS 11, 'Joint arrangements' andIFRS 12 'Disclosures of interests in other entities'. The adoption of thesestandards has had no effect on the financial statements for earlier periods andon the interim financial statements for the period ended 30 June 2014 and isnot expected to have a significant effect on the results for the financial yearending 31 December 2014. IFRIC 21 'Levies'. IFRIC 21 addresses the accounting for a liability to pay alevy if that liability is within the scope of IAS 37 'Provisions'. Theinterpretation addresses what the obligating event is that gives rise to pay alevy, and when should a liability be recognised. The group is not currentlysubject to significant levies. The adoption of the interpretation has had nosignificant effect on the financial statements for earlier periods and on theinterim financial statements for the period ended 30 June 2014. The group doesnot expect IFRIC 21 to have a significant effect on the results for thefinancial year ending 31 December 2014. There are no other new standards, interpretations or amendments to standardsissued and effective for the period which materially impacted on the Group. The following exchange rates to the US dollar have been applied: Average Average Average year As at six months As at six months As at ended 30 ended 30 ended 31 31 June 30 June June 30 June December December 2014 2014 2013 2013 2013 2013 South African Rand (US$:ZAR) 10.62 10.70 9.88 9.20 10.50 9.63 Tanzanian Shilling (US$:TZS) 1,650 1,628 1,603 1,590 1,590 1,598 Australian Dollars (US$:AUD) 1.06 1.09 1.08 0.99 1.12 1.03 UK Pound (US$:GBP) 0.58 0.60 0.66 0.65 0.60 0.64 ESTIMATES The preparation of interim financial statements requires management to makejudgements, estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets and liabilities, income andexpense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, thesignificant judgements made by management in applying the Group's accountingpolicies and the key sources of estimation uncertainty were the same as thosethat applied to the consolidated financial statements for the year ended 31December 2013, with the exception of changes in estimates that are required indetermining the provision for income taxes (see note 3). DISCONTINUED OPERATIONS AND DISPOSAL GROUP ASSETS AND LIABILITIES HELD FOR SALE On 15 November 2013, ABG announced that an agreement was reached with STAMICO,the Tanzanian State Mining Corporation, whereby STAMICO would acquire theTulawaka Gold Mine ("Tulawaka") and certain exploration licences surroundingTulawaka for consideration of US$4.5 million and the grant of a 2% net smelterroyalty on future production in excess of 500,000 ounces, capped at US$0.5million. On 4 February 2014, ABG announced the completion of the sale. STAMICO has takenownership and management of the rehabilitation fund established as part of theclosure plan for the mine, in return for the assumption of all remaining pastand future closure and rehabilitation liabilities for Tulawaka, and hasindemnified the other parties to the agreement in relation to theseliabilities. The transfer was completed with a net cash payment of US$11.6million by ABG to STAMICO for the balance of the rehabilitation fund, less thetransaction consideration. This resulted in a net gain on sale of assets ofUS$4.1 million. After non operational costs incurred in the six months to 30June 2014 and other closing adjustments, this resulted in a total cash outflowyear to date of US$14.4 million. The financial results of Tulawaka have been presented as discontinuedoperations in the consolidated interim financial information. The comparativeresults in the consolidated interim income statement have been presented as ifTulawaka had been discontinued from the start of the comparative period. Below is a summary of the results of Tulawaka for the six months ended 30 June2014 and 30 June 2013, and year ended 31 December 2013: For the year ended For the six months 31 ended 30 June December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 2013 Results of discontinued operations Revenue - 12,392 13,514 Cost of sales - (28,151) (30,368) Gross loss - (15,759) (16,854) Corporate administration - (1,187) (1,311) Exploration and evaluation costs - 161 - Corporate social responsibility expenses1 (92) (690) (3,259) Impairment charges - (16,701) (16,701) Other charges2 958 (6,496) (19,442) Profit/(loss) before net finance expense and taxation 866 (40,672) (57,567) Finance income 36 10 30 Finance expense (16) (79) (116) Profit/(loss) before taxation 886 (40,741) (57,653) Tax expense - - - Net profit/(loss) for the period 886 (40,741) (57,653) 1 Corporate social responsibility expenses relate to projects supported fromthe ABG Maendeleo Fund. 2 Other charges consist of non-operational costs incurred since the cessationof operations. Segment Reporting The Group has only one primary product produced in a single geographiclocation, being gold produced in Tanzania. In addition the Group producescopper and silver as a co-product. Reportable operating segments are based onthe internal reports provided to the Chief Operating Decision Maker ("CODM") toevaluate segment performance, decide how to allocate resources and make otheroperating decisions. After applying the aggregation criteria and quantitativethresholds contained in IFRS 8, the Group's reportable operating segments weredetermined to be: North Mara gold mine; Tulawaka gold mine; Bulyanhulu goldmine; Buzwagi gold mine; and a separate Corporate and Exploration segment,which primarily consist of costs related to corporate administration andexploration and evaluation activities ("Other"). Segment results and assets include items directly attributable to the segmentas well as those that can be allocated on a reasonable basis. Segment assetsconsist primarily of property, plant and equipment, inventories, other assetsand receivables. Capital expenditures comprise additions to property, plant andequipment. Segment liabilities are not reported since they are not consideredby the CODM as material to segment performance. The Group has also includedsegment cash costs. Segment information for the reportable operating segments of the Group for thesix months ended 30 June 2014 and 30 June 2013, and year ended 31 December 2013is set out below. For the six months ended 30 June 2014 (Unaudited) North Continuing Discontinued(US$'000) Mara Bulyanhulu Buzwagi Other operations operations6 Total Gold revenue 176,669 130,319 119,777 - 426,765 - 426,765 Co-product revenue 280 8,426 10,038 - 18,744 - 18,744 Total segment revenue 176,949 138,745 129,815 - 445,509 - 445,509 Segment cash operating cost1 (80,427) (96,092) (91,259) - (267,778) - (267,778) Corporate administration and exploration (5,005) (4,605) (4,008) (16,269) (29,887) - (29,887) Other charges and corporate socialresponsibility expenses (6,196) (4,519) (6,596) 222 (17,089) 866 (16,223) EBITDA2 85,321 33,529 27,952 (16,047) 130,755 866 131,621 Impairment charges - - - Depreciation and amortisation7 (35,724) (20,063) (7,470) (1,439) (64,696) - (64,696) EBIT2 49,597 13,466 20,482 (17,486) 66,059 866 66,925 Finance income 136 72 195 226 630 36 666 Finance expense (1,263) (766) (1,230) (1,246) (4,504) (16) (4,520) Profit before taxation 48,471 12,772 19,447 (18,506) 62,185 886 63,071 Tax expense (14,783) (3,507) (5,835) 1,408 (22,716) - (22,716) Net profit for the period 33,689 9,265 13,612 (17,097) 39,469 886 40,355 Capital expenditure: Sustaining 8,088 4,482 5,776 626 18,972 - 18,972 Expansionary 978 25,831 - - 26,809 - 26,809 Capitalised development 25,392 28,414 15,157 68,963 - 68,963 Reclamation asset addition 5,358 8,721 839 - 14,918 - 14,918 Total capital expenditure 39,816 67,448 21,772 626 129,662 - 129,662 Segmental cash operating cost 80,427 96,092 91,259 - 267,778 - 267,778 Deduct: co-product revenue (280) (8,426) (10,038) - (18,744) - (18,744) Total cash costs 80,147 87,666 81,221 - 249,034 - 249,034 Sold ounces3 137,340 101,165 92,442 - 330,947 - 330,947 Cash cost per ounce sold2 584 867 879 752 - 752 Attributable to outside interests4 - Attributable cash cost per ounce sold2 752 Cash cost per ounce sold2 584 867 879 752 - 752 Corporate administration charges 35 43 42 57 - 57 Rehabilitation - accretion and depreciation 19 7 7 12 - 12 Mine site exploration costs 1 2 1 2 - 2 Corporate social responsibility expenses 15 4 14 13 - 13 Capitalised stripping/ UG development 185 281 164 208 - 208 Sustaining capital expenditure8 97 45 62 74 - 74 Attributable to outside interests4 - All-in sustaining cost per ounce sold2 936 1,249 1,169 1,118 - 1,118 Segment carrying value5 344,975 1,158,894 257,522 92,844 1,854,235 - 1,854,235 For the six months ended 30 June 2013 (Restated) (Unaudited) North Continuing Discontinued(US$'000) Mara Bulyanhulu Buzwagi Other operations operations6 Total Gold revenue 194,992 127,244 142,454 - 464,690 12,365 477,055 Co-product revenue 365 7,704 14,601 - 22,670 27 22,697 Total segment revenue 195,357 134,948 157,055 - 487,360 12,392 499,752 Segment cash operating cost1 (96,538) (98,425) (103,103) (298,066) (19,441) (317,507) Corporate administration and exploration (7,141) (7,439) (16,468) 9,611 (21,437) (1,026) (22,463) Other charges and corporate socialresponsibility expenses (6,729) (3,355) (3,814) (7,927) (21,825) (7,186) (29,011) EBITDA2 84,949 25,729 33,670 1,684 146,032 (15,261) 130,771 Impairment charges (173,938) - (690,478) (46,573) (910,989) (16,701) (927,690) Depreciation and amortisation7 (40,859) (16,645) (29,332) (1,831) (88,667) (8,710) (97,377) EBIT2 (129,848) 9,084 (686,140) (46,720) (853,624) (40,672) (894,296) Finance income 170 581 221 24 995 10 1,005 Finance expense (1,196) (783) (1,168) (1,549) (4,696) (79) (4,775) Loss before taxation (130,874) 8,882 (687,088) (48,245) (857,325) (40,741) (898,066) Tax expense 33,278 (2,892) 146,754 7,507 184,648 - 184,648 Net loss for the period (97,595) 5,990 (540,334) (40,738) (672,677) (40,741) (713,418) Capital expenditure: Sustaining 23,962 15,546 20,657 85 60,250 583 60,833 Expansionary 504 52,421 - 941 53,866 - 53,866 Capitalised development 28,917 24,102 41,338 - 94,357 - 94,357 Reclamation asset reduction (5,950) (9,208) (6,809) - (21,967) (161) (22,128) Total capital expenditure 47,433 82,861 55,186 1,026 186,506 422 186,928 Segmental cash operating cost 96,538 98,425 103,103 - 298,066 19,441 317,507 Deduct: co-product revenue (365) (7,704) (14,601) - (22,670) (27) (22,697) Total cash costs 96,173 90,721 88,502 - 275,396 19,414 294,810 Sold ounces3 130,200 87,802 96,367 - 314,369 7,950 322,319 Cash cost per ounce sold2 739 1,033 918 - 876 2,442 915 Attributable to outside interests4 (12) Attributable cash cost per ounce sold2 903 Cash cost per ounce sold2 739 1,033 918 876 2,442 915 Corporate administration charges 39 80 54 44 149 46 Rehabilitation - accretion and depreciation 34 8 21 23 77 24 Mine site exploration costs 16 4 3 8 (20) 8 Corporate social responsibility expenses 29 5 4 20 87 21 Capitalised stripping/ UG development 222 274 429 300 - 293 Sustaining capital expenditure8 234 177 214 212 73 209 Attributable to outside interests4 (9) All-in sustaining cost per ounce sold2 1,313 1,581 1,643 1,483 2,808 1,507 Segment carrying value5 456,914 1,052,184 209,064 79,653 1,797,815 - 1,797,815 For the year ended 31 December 2013 (Audited) North Continuing Discontinued(US$'000) Mara Bulyanhulu Buzwagi Other operations operations6 Total Gold revenue 364,574 262,539 258,879 - 885,992 13,483 899,475 Co-product revenue 819 16,882 25,311 - 43,012 31 43,043 Total segment revenue 365,393 279,421 284,190 - 929,004 13,514 942,518 Segment cash operating cost1 (172,894) (190,647) (202,286) - (565,827) (20,527) (586,354) Corporate administration and exploration (13,026) (14,661) (20,976) (421) (49,084) (1,311) (50,395) Other charges and corporate socialresponsibility expenses (11,961) (5,827) (4,730) (20,143) (42,661) (22,701) (65,362) EBITDA2 167,512 68,286 56,198 (20,564) 271,432 (31,025) 240,407 Impairment charges (307,259) - (690,478) (46,573) (1,044,310) (16,701) (1,061,011) Depreciation and amortisation7 (68,565) (35,867) (39,906) (3,641) (147,979) (9,841) (157,820) EBIT2 (208,312) 32,419 (674,186) (70,778) (920,857) (57,567) (978,424) Finance income 327 662 406 275 1,670 30 1,700 Finance expense (2,501) (1,482) (2,446) (3,123) (9,552) (116) (9,668) Loss before taxation (210,486) 31,599 (676,226) (73,626) (928,739) (57,653) (986,392) Tax credit 44,283 (13,977) 146,990 10,663 187,959 - 187,959 Net loss for the year (166,203) 17,622 (529,236) (62,963) (740,780) (57,653) (798,433) Capital expenditure: Sustaining 38,386 25,193 31,589 690 95,858 583 96,441 Expansionary 949 114,912 - 1,608 117,469 - 117,469 Capitalised development 65,594 45,428 60,136 - 171,158 - 171,158 Reclamation asset reduction (11,271) (10,044) (9,230) - (30,545) (195) (30,740) Total capital expenditure 93,658 175,489 82,495 2,298 353,940 388 354,328 Segmental cash operating cost 172,894 190,647 202,286 - 565,827 20,527 586,354 Deduct: co-product revenue (819) (16,882) (25,311) - (43,012) (31) (43,043) Total cash costs 172,075 173,765 176,975 - 522,815 20,496 543,311 Sold ounces3 260,945 195,304 187,348 - 643,597 8,778 652,375 Cash cost per ounce sold2 659 890 945 812 2,335 833 Attributable to outside interests4 (6) Attributable cash cost per ounce sold2 827 Cash cost per ounce sold2 659 890 945 812 2,335 833 Corporate administration charges 38 72 51 50 149 51 Rehabilitation - accretion and depreciation 29 7 15 18 86 19 Mine site exploration costs 12 3 2 6 6 6 Corporate social responsibility expenses 31 6 4 19 371 24 Capitalised stripping/ UG development 251 233 321 266 - 262 Sustaining capital expenditure8 207 133 168 175 66 173 Attributable to outside interests4 (6) All-in sustaining cost per ounce sold2 1,227 1,344 1,506 1,346 3,013 1,362 Segment carrying value5 367,326 1,116,142 253,344 81,005 1,817,817 10,489 1,828,306 1 The CODM reviews cash operating costs for the three operating mine sitesseparately from corporate administration costs and exploration costs.Consequently, the Group has reported these costs in this manner. 2 These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to "Non IFRS measures" on page 23 for definitions. 3 Reflects 100% of ounces sold. 4 Reflects the adjustment for non-controlling interests at Tulawaka. 5 Segment carrying values are calculated as shareholders equity after addingback debt and intercompany liabilities, and subtracting cash and intercompanyassets and include outside shareholder's interest. 6 Represents Tulawaka which has been discontinued. 7 Depreciation and amortisation includes the depreciation component of thecost of inventory sold. 8 Sustaining capital expenditure for the purposes of all-in sustaining costper ounce sold includes land purchases which are classified as long termprepayments in the balance sheet. OTHER CHARGES For the year ended For the six months ended 31 30 June December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 Restated1 2013 Other expenses Operational Review costs (including retrenchment cost) 5,317 1,629 13,305 Foreign exchange losses (net) 7,794 40 - Non-hedge derivative losses (net) - 4,807 7,203 Government levies and charges 527 - 2,387 Bad debt expense - 1,159 1,369 Disallowed indirect taxes 401 3,784 1,463 Legal costs 1,931 1,018 3,138 CNG related costs (residual) - 2,374 3,246 Discounting of indirect tax receivables - 1,375 1,375 Other - - 3,617 Total 15,970 16,186 37,103 Other income Profit on disposal of property, plant and equipment (45) (86) (99) Insurance theft claim - - (2,958) Construction and consumable inventory gains - (111) - Non-hedge derivative gains (net) (2,748) - - Foreign exchange gains (net) - - (3,622) Other (395) (392) - Total (3,188) (589) (6,679) Total other charges 12,782 15,597 30,424 1 Restated due to the classification of Tulawaka as a discontinued operation.Refer to note 5. FINANCE INCOME AND FINANCE EXPENSE Finance income For the six months ended For the year ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 Restated3 2013 Interest on time deposits 382 753 937 Other 248 242 733 Total 630 995 1,670 Finance expense For the year ended For the six months ended 31 30 June December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 Restated3 2013 Unwinding of discount1 2,457 2,145 4,468 Revolving credit facility charges2 1,194 1,510 3,050 Interest on CIL facility 1,972 757 2,413 Interest on finance lease liability 164 333 658 Bank charges 313 396 756 Other 376 312 620 6,476 5,453 11,965 Capitalised during the year - interest on CIL facility (1,972) (757) (2,413) Total 4,504 4,696 9,552 1 The unwinding of discount is calculated on the environmental rehabilitationprovision. 2 Included in credit facility charges are the amortisation of the fees relatedto the revolving credit facility as well as the monthly interest and facilityfees. 3 Restated due to the classification of Tulawaka as a discontinued operation.Refer to Note 5. TAX (CREDIT)/EXPENSE For the year For the six months ended ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 Restated1 2013 Current tax: Current tax on profits for the period - 28 - Adjustments in respect of prior years - - 40 Total current tax - 28 40 Deferred tax: Origination and reversal of temporary differences 22,716 (184,676) (187,999) Total deferred tax 22,716 (184,676) (187,999) Income tax expense/(credit) 22,716 (184,648) (187,959) 1 Restated due to the classification of Tulawaka as a discontinued operation.Refer to note 5. The tax on the Group's profit before tax differs from the theoretical amountthat would arise using the weighted average tax rate applicable to the profitsof the consolidated entities as follow: For the year For the six months ended ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 Restated 2013 Tax on profit/(loss) calculated at the Tanzanian tax rate of 30% 18,655 (269,420) (292,917) Tax effects of: Prior year adjustments - - 5,572 Other non-deductible expenses 254 93 13,111 Effect of tax rates in foreign jurisdictions (426) (1,754) 1,371 Deferred tax assets not recognised 4,233 73,540 84,904 Income tax payable - (28) - Impairment of goodwill - 12,921 - Tax charge/(credit) 22,716 (184,648) (187,959) The tax rate in Tanzania is 30% (2013: 30%) and in South Africa 28% (2013:28%). Tax periods remain open to review by the Tanzania Revenue Authority ("TRA") inrespect of income taxes for 5 years following the date of the filling of thecorporate tax return, during which time the authorities have the right to raiseadditional tax assessments including penalties and interest. Under certaincircumstances the reviews may cover longer periods. Because a number of taxperiods remain open to review by tax authorities, there is a risk thattransactions that have not been challenged in the past by the authorities maybe challenged by them in the future, and this may result in the raising ofadditional tax assessments plus penalties and interest. The Group haspreviously accounted for an adjustment to unrecognised tax benefits in respectof tax losses to reflect uncertainty regarding recoverability of certain taxlosses. The Group makes no further provision in respect of such potential taxassessments. Earnings/ (LOSS) per share Basic earnings/ (loss) per share ("EPS") is calculated by dividing the netprofit/ (loss) for the period attributable to owners of the Company by theweighted average number of Ordinary Shares in issue during the period. Diluted earnings/ (loss) per share is calculated by adjusting the weightedaverage number of Ordinary Shares outstanding to assume conversion of alldilutive potential Ordinary Shares. The Company has dilutive potential OrdinaryShares in the form of stock options. The weighted average number of shares isadjusted for the number of shares granted assuming the exercise of stockoptions. At 30 June 2014, 30 June 2013 and 31 December 2013, (loss)/earnings per sharehave been calculated as follows: For the For the six months ended year ended 30 June 31 December (Unaudited) (Unaudited) (Audited)(US$'000) 2014 2013 Restated1 2013 RestatedEarnings/(loss)Net profit/(loss) from continuing operations attributable toowners of the parent 39,469 (672,677) (740,780) Net profit/(loss) from discontinued operations attributable to owners of the parent 1,353 (28,553) (40,321) Weighted average number of Ordinary Shares in issue 410,085,499 410,085,499 410,085,499 Adjusted for dilutive effect of stock options 194,163 - - Weighted average number of Ordinary Shares for diluted 410,279,662 410,085,499 410,085,499earnings per share Earnings/(loss) per share 10.0 171.0 (190.4) Basic and dilutive earnings/(loss) per share from 9.6 (164.0) (180.6)continuing operations (cents) Basic and dilutive earnings/(loss) per share fromdiscontinued operations (cents) 0.4 (7.0) (9.8) 1 Restated due to the classification of Tulawaka as a discontinued operation.Refer to note 5. 11. DIVIDENDS The final dividend declared in respect of the year ended 31 December 2013 ofUS$8.2 million (US2.0 cents per share) was paid during 2014. 12. Property plant and equipment Mineral properties AssetsFor the six months ended 30 June 2014 and mine under(Unaudited) Plant and development construction(US$'000) equipment costs ¹ Total At 1 January 2014, net of accumulateddepreciation 296,299 596,166 388,206 1,280,671 Additions - - 129,662 129,662 Depreciation (28,941) (35,805) - (64,746) Transfers between categories 44,126 62,477 (106,603) - At 30 June 20142 311,484 622,838 411,265 1,345,587 At 1 January 2014 Cost 1,397,456 1,315,918 425,083 3,138,457 Accumulated depreciation (1,101,157) (719,752) (36,877) (1,857,786) Net carrying amount 296,299 596,166 388,206 1,280,671 At 30 June 2014 Cost 1,441,472 1,378,395 448,142 3,268,009 Accumulated depreciation and impairment (1,129,988) (755,557) (36,877) (1,922,422) Net carrying amount 311,484 622,838 411,265 1,345,587 For the six months Mineral Assetsended 30 June 2013 properties and under(Unaudited) Plant and mine development construction(US$'000) equipment costs ¹ Total At 1 January 2013, netof accumulateddepreciation andimpairment 945,118 819,063 210,859 1,975,040 Additions - - 186,928 186,928 Impairments (510,650) (235,975) (36,876) (783,501) Depreciation (54,907) (35,446) - (90,353) Transfers betweencategories 74,457 104,360 (178,817) - At 30 June 2013 454,018 652,002 182,094 1,288,114 At 1 January 2013 Cost 1,475,374 1,250,088 210,859 2,936,321 Accumulateddepreciation andimpairment (530,256) (431,025) - (961,281) Net carrying amount 945,118 819,063 210,859 1,975,040 At 30 June 2013 Cost 1,549,580 1,354,447 218,970 3,122,997 Accumulateddepreciation andimpairment (1,095,562) (702,445) (36,876) (1,834,883) Net carrying amount 454,018 652,002 182,094 1,288,114 Mineral properties Assets and mine under(Audited) Plant and development construction(US$'000) equipment costs ¹ Total For the year ended 31 December 2013 At 1 January 2013, net of accumulated depreciation andimpairment 945,118 819,063 210,859 1,975,040 Additions - - 354,328 354,328 Disposals/write-downs (477) - - (477) Impairments (582,669) (287,276) (36,877) (906,822) Depreciation (84,350) (56,809) - (141,159) Transfers between categories 18,677 121,427 (140,104) - Reclassification to disposal group assets held for sale - (239) - (239) At 31 December 2013 296,299 596,166 388,206 1,280,671 At 1 January 2013 Cost 1,475,374 1,250,088 210,859 2,936,321 Accumulated depreciation and impairment (530,256) (431,025) - (961,281) Net carrying amount 945,118 819,063 210,859 1,975,040 At 31 December 2013 Cost 1,397,456 1,315,918 425,083 3,138,457 Accumulated depreciation and impairment (1,101,157) (719,752) (36,877) (1,857,786) Net carrying amount 296,299 596,166 388,206 1,280,671 Assets under construction represents (a) sustaining capital expendituresincurred constructing tangible fixed assets related to operating mines andadvance deposits made towards the purchase of tangible fixed assets; and (b)expansionary expenditure allocated to a project on a business combination orasset acquisition, and the subsequent costs incurred to develop the mine. Oncethese assets are ready for their intended use, the balance is transferred toplant and equipment, and/ or mineral properties and mine development costs. The gain on disposal of assets reflected in the income statement relates to theassets disposed of in the sale of Tulawaka which were transferred to assetsheld for sale in the year ended 31 December 2013. Leases Property, plant and equipment includes assets relating to the design andconstruction costs of power transmission lines and related infrastructure. Atcompletion, ownership was transferred to TANESCO in exchange for amortisedrepayment in the form of reduced electricity supply charges. No future leasepayment obligations are payable under these finance leases. Property, plant and equipment also includes emergency back-up and spinningpower generators leased at Buzwagi mine under a three year lease agreement,with an option to purchase the equipment at the end of the lease term. Thelease has been classified as a finance lease. Property, plant and equipment further includes drill rigs leased at Buzwagimine under a one year rent to own lease agreement. The lease has beenclassified as a finance lease. The following amounts were included in property, plant and equipment where theGroup is a lessee under a finance lease: For the six months ended For the year ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 2013 Cost - capitalised finance leases 70,764 68,846 70,764 Accumulated depreciation (16,836) (17,065) (16,430) Net carrying amount 53,928 51,781 54,334 13. Derivative financial instruments The table below analyses financial instruments carried at fair value, byvaluation method. The Group has derivative financial instruments in the form ofeconomic and cash flow hedging contracts which are all defined as level twoinstruments as they are valued using inputs other than quoted prices that areobservable for the assets or liabilities. The following tables present thegroup's assets and liabilities that are measured at fair value at 30 June 2014,30 June 2013 and 31 December 2013. Assets Liabilities Net(Unaudited) fair(US$'000) Current Non-current Current Non-current value For the six months ended 30 June 2014 Interest contracts: Designated as cash flow hedges - 1,823 1,204 - 619 Currency contracts: Not designated as hedges 66 - 665 203 (802) Commodity contracts: Not designated as hedges 943 - - - 943 Total 1,009 1,823 1,869 203 760 Assets Liabilities Net(Unaudited) fair(US$'000) Current Non-current Current Non-current value For the six months ended 30 June 2013 Currency contracts: Designated as cash flow hedges - - 1,652 - (1,652) Interest contracts: Designated as cash flow hedges - 2,645 903 - 1,742 Currency contracts: Not designated as hedges 1,148 - 5,848 1,542 (6,242) Commodity contracts: Not designated as hedges 3,788 - 111 24 3,653 Total 4,936 2,645 8,514 1,566 (2,499) Assets Liabilities Net(Audited) fair(US$'000) Current Non-current Current Non-current value For the year ended 31 December 2013 Currency contracts: Designated as cash flow hedges - - - 353 (353) Interest contracts: Designated as cash flow hedges - 3,191 1,168 449 1,574 Currency contracts: Not designated as hedges 158 3 3,666 387 (3,892) Commodity contracts: Not designated as hedges 1,208 59 240 18 1,009 Total 1,366 3,253 5,074 1,207 (1,662) BORROWINGS During 2013, a US$142 million facility was put in place to fund the bulk of thecosts of the construction of one of our key growth projects, the Bulyanhulu CILExpansion project ("Project"). The facility is collateralised by the Project,and has a term of seven years with a spread over Libor of 250 basis points. Theseven year facility is repayable in equal instalments over the term of thefacility, after a two year repayment holiday period. The interest rate has beenfixed at 3.6% through the use of an interest rate swap. The full facility ofUS$142 million was drawn in 2013. Interest incurred on the borrowings has beencapitalised to the asset (US$2.0 million). COMMITMENTS AND CONTINGENCIES The Group is subject to various laws and regulations which, if not observed,could give rise to penalties. As at 30 June 2014, the Group has the followingcommitments and/or contingencies: a) Legal contingencies As at 30 June 2014, the Group was a defendant in approximately 316 lawsuits.The plaintiffs are claiming damages and interest thereon for the loss caused bythe Group due to one or more of the following: unlawful eviction, terminationof services, wrongful termination of contracts of service, non-payment forservices, defamation, negligence by act or omission, unpaid overtime and publicholiday compensation. The total amounts claimed from lawsuits in which specific monetary damages aresought amounted to US$163.6 million. The Group's Legal Counsel is defending theGroup's current position, and the outcome of the lawsuits cannot presently bedetermined. However, in the opinion of the Directors and Group's Legal Counsel,no material liabilities are expected to materialise from these lawsuits.Consequently no provision has been set aside against the claims in the books ofaccount. Included in the total amounts claimed is an appeal by the TRA intended for atax assessment of US$21.3 million in respect of the acquisition of Tusker GoldLimited. The case was awarded in favour of ABG however, the TRA has served anotice of appeal. The calculated tax assessment is based on the sales price ofthe Nyanzaga property of US$71 million multiplied by the tax rate of 30%.Management is of the opinion that the assessment is invalid due to the factthat the acquisition was for Tusker Gold Limited, a company incorporated inAustralia. The shareholding of the Tanzanian-related entities did not changeand the Tusker Gold Limited group structure remains the same as prior to theacquisition. Also included in the total amounts claimed is TRA claims to the value ofUS$41.25 million for withholding tax on historic offshore dividend paymentspaid by ABG to its shareholders. In addition to the claim, there are six otherwithholding tax claims which have not been quantified. These claims are made onthe basis that ABG is resident in Tanzania for tax purposes. Management are ofthe opinion that the claims do not have substance and that they will besuccessfully defended. b) Tax-related contingencies The TRA has issued a number of tax assessments to the Group relating to pasttaxation years from 2002 onwards. The Group believes that these assessments areincorrect and has filed objections to each of them. The Group is attempting toresolve these matters by means of discussions with the TRA or through theTanzanian appeals process. During the year under review the Board ruled infavour of BGML in relation to seven of ten issues raised by the TRA in finalassessments for the 2000-2006 years under review. The TRA filed a notice ofintention to appeal against the ruling of the Board, while ABG has filed acounter appeal in respect of Bulyanhulu to the Appeals Tribunal for all threeitems that were lost. The positions that were ruled against BGML weresufficiently provided for in prior year results and management is of theopinion that open issues will not result in any material liabilities to theGroup. RELATED PARTY BALANCES AND TRANSACTIONS The Group has related party relationships with entities owned or controlled byBarrick Gold Corporation, which is the ultimate controlling party of the Group. The Company and its subsidiaries, in the ordinary course of business, enterinto various sales, purchase and service transactions and other professionalservices arrangements with others in the Barrick Group. These transactions areunder terms that are on normal commercial terms and conditions. Thesetransactions are not considered to be significant. At 30 June 2014 the Group had no loans of a funding nature due to or fromrelated parties (30 June 2013: zero; 31 December 2013: zero). subsequent events The Board of the Company has approved an interim dividend of US1.4 cents pershare for this financial year to be paid on 22 September 2014 to shareholderson the register on 29 August 2014.