Abbot : Half-year 2014 results

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 production and continued cost discipline enabling the business to return to cash generation," said Brad Gordon, Chief Executive Officer of African Barrick Gold. "We have now delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational improvements through the business. During H1 2014 we produced 346,581 ounces of gold, an improvement of 13% on the same period in 2013, at an AISC of US$1,118 per ounce, a reduction of 25% on the previous year. During the second quarter, we delivered the first ounces from the Bulyanhulu CIL Expansion project with development work on the Bulyanhulu Upper East zone and the Gokona underground exploration portal progressing to plan. As a result of the strong H1 2014 performance and the incorporation of the expected production from Bulyanhulu Upper East, we now expect full year gold production to be in excess of 700,000 ounces whilst continuing to target an AISC at the bottom of our guidance range of US$1,100-1,175 per ounce." Operational Highlights Q2 gold production of 178,206 ounces, 8% higher than Q2 2013, with gold sales of 171,563 ounces Q2 AISC1,2 of US$1,105 per ounce sold, 21% lower than Q2 2013, with cash costs1,2 of US$749 per ounce H1 gold production of 346,581 ounces with gold sales of 330,947 ounces, 13% and 5% respectively, higher than H1 2013 H1 AISC1,2 of US$1,118 per ounce sold and cash costs1,2 of US$752, respectively down 25% and 14% on H1 2013 First ounces produced from the Bulyanhulu CIL Expansion project, with final commissioning due to complete in Q3 2014 Bulyanhulu Upper East and North Mara Underground projects progressing well and on 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$270 million as at 30 June 2014 H1 revenue of US$446 million, 9% below H1 2013, as the impact of a lower average 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 a higher 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$115 million, 45% lower than H1 2013 due to revised mine plans and stringent capital controls Interim dividend of US1.4 cents per share declared, based on a new cash flow based metric Three months ended 30 June Six months ended 30 June (Unaudited) 2014 20132 2014 20132 Gold Production (ounces) 178,206 164,439 346,581 307,198 Gold Sold (ounces) 171,563 170,092 330,947 314,369 Cash cost (US$/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 the Operational 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. Together with a strong production profile, this enabled ABG to deliver a return to net cash flow generation during Q2 2014. We remain committed and on track to deliver against the US$185 million cost saving target as previously set out and reflected in our AISC guidance. Safety During the first half of the year, Bulyanhulu regrettably experienced one fatality. On 25 March 2014, Emmanuel Mrutu, one of our underground employees sadly passed away as a result of injuries sustained following a fall-of-ground incident. We have completed internal and external investigations into this tragic incident in order to mitigate any future reoccurrence. As a mark of respect operations ceased for a 24 hour period. During the second quarter Bulyanhulu experienced a non-operational fatality which led to two weeks of disrupted operations at the mine. On 20 May 2014, an underground employee went missing following a night shift. All mining operations were initially ceased and an intensive search operation was launched. On 1 June 2014, the body of the deceased was found and investigations by the Tanzanian authorities have subsequently determined that regrettably the employee took his own life. Ensuring the safety of all our employees is paramount, and we have continuously improved our safety performance at all of our operations over the past few years. In this regard, we have launched a behavioural safety programme called WeCare 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 as Non-Executive Director of the Company. The ABG Board now comprises eleven Directors, including seven Independent Non-Executive Directors, one Executive Director and three nominees from Barrick Gold Corporation. Indirect Taxes Further progress has been made with respect to the build up of VAT, and the Company received net refunds of US$18 million during the second quarter, bringing total net refunds for H1 2014 to approximately US$28 million. We have also continued discussions with the Tanzanian Government on the establishment of an appropriate mechanism to safeguard the recoverability of VAT payments over the long term. In this regard, we have submitted proposals for the establishment of an escrow account for VAT paid on domestic goods, similar to that currently used to provide for the refunding of VAT paid on imports and are awaiting further feedback on this proposal. As at 30 June 2014, the outstanding amount relating to the total indirect tax receivable, not covered by the 2011 Memorandum of Settlement, stood at US$66 million, roughly US$30 million lower than 31 December 2013. Bulyanhulu Upper East In April 2014 the Board approved the next step in the optimisation of Bulyanhulu through the acceleration of mining from the Upper East Zone. The Zone is expected to produce 1.7 million ounces of gold, averaging 60,000 ounces per annum over a life in excess of 25 years at an AISC of below our target run rate for Bulyanhulu for year-end 2015 of US$900 per ounce. Following the Board approval, the mine undertook waste development in the Zone at a capital cost of US$4.7 million in Q2 2014. As expected, the mine will commence ore development in Q3 2014 and this is expected to lead to production from 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 2014 capital requirements for the project will be approximately US$15 million. All capital associated with the project to date has been categorised as capitalised development and is included in the Bulyanhulu and Group AISC figures. Bulyanhulu Deep West We have also progressed the accelerated development of the Bulyanhulu Deep West Zone through a contractor to increase access to higher grade ore from Q4 2014. During Q2 2014 we incurred underground development capital costs of US$4.8 million for the project and we expect to incur similar costs per quarter for the remainder of 2014. This will be categorised as capitalised development and is included in the Bulyanhulu and Group AISC figures. Bulyanhulu CIL Expansion During the second quarter, we progressed the commissioning of the new CIL circuit at Bulyanhulu, which will add over 40,000 ounces per annum once fully operational, and are nearing completion of the commissioning stage. Towards the end of June, roughly 6,500 tonnes of rougher tailings were treated and pumped into the new CIL circuit, resulting in 273 ounces of gold being produced in circuit. We expect commissioning to be complete in early Q3 2014 with the first gold pour in August and the ramp up of production to continue throughout the third quarter. We continue to expect production of 20,000 ounces in 2014 from the project, and are investigating an option for accelerating the retreatment of 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 an underground operation progressed well in the second quarter and is on track to be presented to the Board for approval in Q4 2014. During Q2 2014, ABG made the final decision on the location of the exploration portal which will provide the opportunity to develop a better understanding of the ore body, provide initial access 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 the first blast due in August. The total expansionary capital cost of the portal is expected to be around US$10 million. Interim dividend To ensure that our dividend policy is more closely aligned with the cash generation of the business, the Board of Directors have approved an amendment to the existing dividend policy such that rather than being based on net earnings it will now be based on operational cash flow after sustaining capital and capitalised development but before expansion capital. The Board believes this metric more appropriately reflects both ABG's and the wider market's focus on cash flow generation as well as the commitment to ongoing 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 dividend and the balance as a final dividend, remain unchanged. In line with the above change, the Board of Directors is pleased to announce the approval of an interim dividend for 2014 of US1.4 cents per share, an increase of 40% when compared to H1 2013. The interim dividend will be payable on 22 September 2014 to holders on record at 29 August 2014. The ex-dividend date will be 27 August 2014. ABG will declare the interim dividend in US dollars. Unless a shareholder elects to receive dividends in US dollars, they will be paid in pounds sterling with the US dollar amount being converted into pounds sterling at the exchange rate prevailing at the time. The last date for receipt of currency elections will be 2 September 2014. The exchange rate for the conversion of the interim dividend will be elected on or around 4 September 2014. Outlook Over the past six months we have continued to deliver a strong performance from our operating portfolio, with sustainable cost containment across each of the mines and production growth led by North Mara. As we move into the second half of the year we expect the contribution from Bulyanhulu to increase as we begin to access higher grade areas, and both the CIL Expansion and the Upper East projects begin to contribute ounces. At North Mara, we expect the head grade to drop in the second half of the year as the high grade ore from Gokona will be increasingly blended with lower grade material from Nyabirama. At Buzwagi, we expect the grade to revert to between 1.5-1.6g/t in the second half, but anticipate that throughput levels will increase. Following the approval of the Upper East Project and the Gokona Underground portal in Q2 2014 we expect capital expenditure for the year to be between US$255-275 million. Sustaining capital (including land purchases) is expected to be US$80-90 million, with an acceleration of spending in the second half of the year versus H1 2014. Capitalised development is expected to total US$125-135 million as a result of the accelerated development of the Bulyanhulu Deep West Zone together with the categorisation of the Bulyanhulu Upper East project as capitalised development. Expansionary capital is expected to amount to US$50 million which incorporates reduced residual CIL Expansion spend and the Gokona Underground portal. As a result of the strong performance in H1 2014 and the addition of the Upper East ounces into the 2014 plan, we are revising production guidance upwards for the year to in excess of 700,000 ounces. We maintain our guidance for cash costs of US$740 to US$790 per ounce and all-in sustaining costs of US$1,100 to US$1,175 per ounce sold, and are targeting the bottom of both these ranges. Key statistics - restated to reflect Tulawaka as a discontinued operation Three months Six months ended ended 30 June 30 June (Unaudited) 2014 20133 2014 20133 Tonnes mined (thousands of tonnes) 10,355 15,141 19,892 29,118 Ore tonnes mined (thousands of tonnes) 2,115 1,727 3,908 3,378 Ore tonnes processed (thousands of tonnes) 1,925 2,072 3,770 3,983 Process recovery rate (percent) 89.8% 88.8% 89.5% 88.9% Head grade (grams per tonne) 3.2 2.7 3.2 2.7 Gold production (ounces) 178,206 164,439 346,581 307,198 Gold sold (ounces) 171,563 170,092 330,947 314,369 Copper production (thousands of pounds) 3,454 3,122 6,430 5,584 Copper sold (thousands of pounds) 2,874 2,756 5,391 6,113 Cash cost per tonne milled (US$/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 meaning under 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.com or contact: African Barrick Gold plc +44 (0) 207 129 7150 Brad Gordon, Chief Executive Officer Andrew Wray, Chief Financial Officer Giles Blackham, Investor Relations Manager Bell Pottinger +44 (0) 207 861 3232 Daniel Thöle About ABG ABG is Tanzania's largest gold producer and one of the largest gold producers in Africa. We have three producing mines, all located in Northwest Tanzania, and several exploration projects at various stages of development in Tanzania and Kenya. We have a high-quality asset base, solid growth opportunities and a clear strategy of optimising, expanding and growing our business. Maintaining our licence to operate through acting responsibly in relation to our people, the environment and the communities in which we operate is central to achieving our objectives. ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ABG and have a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation is our majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report. Conference call A conference call will be held for analysts and investors on 25 July 2014 at 11:30am 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 at www.africanbarrickgold.com/investors/financial-reports/2014.aspx after the call. FORWARD- LOOKING STATEMENTS This report includes "forward-looking statements" that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expects," "anticipates," "believes," "intends," "estimates" and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which ABG conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), ABG's ability to successfully integrate acquisitions, ABG's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, ABG's ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in ABG's business strategy including, the ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. Although ABG's management believes that the expectations reflected in such forward-looking statements are reasonable, ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this report. Any forward-looking statements in this report only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this report, whether as a result of new information, future events or otherwise. Nothing in this report should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that ABG's profits or earnings per share for any future period will necessarily match or exceed the historical published profits or earnings per share of ABG. 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 than the same period in 2013. Production of 346,581 ounces drove a 5% increase in sales volumes (16,578 ounces) but this was more than offset by a 13% decrease in the average realised gold price of US$1,290 per ounce, down from US$1,480 in H1 2013. EBITDA increased by 1% to US$131.6 million in H1 2014 despite the lower revenue, mainly due to a US$30.2 million reduction in direct mining costs, reflected in the 25% reduction of AISC to US$1,118 per ounce. Operationally, North Mara continued to mine high grade material from the Gokona pit which drove H1 2014 production of 138,816 ounces, up 8% on the prior year period, 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 H1 2014 production by 13% to 105,420 ounces and AISC down by 21% to US$1,249 per ounce sold. Buzwagi saw a 34% reduction in total tonnes mined over the first half of the year against H1 2013 which helped to reduce AISC by 29% to US$1,169 per ounce sold. Production increased to 102,344 ounces as a result of higher grade material milled which more than offset the reduction in throughput. As a result of operational and working capital improvements, cash generated from operating activities in H1 2014 increased by 28% over the prior year period to US$127.1 million, in spite of the reduction in the average realised sales price. Over the first six months of the year this was US$4.5 million lower than EBITDA, but in Q2 2014 the Company generated positive net cash flows of 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$114.7 million compared to US$209.1 million in H1 2013. Capital expenditure primarily comprised capitalised development expenditure (US$69.0 million), including US$4.7 million related to waste development from the Bulyanhulu Upper East project 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 and equipment costs (US$6.7 million). Second Quarter Review The second quarter delivered positive results, with total production of 178,206 ounces, 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 of the 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% year on year increase in production due to improved throughput rates as a result of improved mill utilisation rates. The improved throughput rate was marginally offset by a 3% decrease in head grade. At Bulyanhulu, production of 50,241 ounces was 9% down on Q2 2013 due to lower throughput as a result of ore shortages given the disruption of mining operations 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 of higher mined grade given improved availability of high grade stopes. At Buzwagi, gold production for the quarter of 57,787 ounces was 26% higher than in Q2 2013 driven by a 36% increase in head grade. Throughput rates were negatively impacted by lower mill availability primarily as a result of the re-lining of both the SAG and Ball mills during the quarter, while ore mined was 67% higher in Q2 2013 year due to previously communicated changes in the mine plan which reduced the amount of waste material removed when compared to Q2 2013. Total tonnes mined during the quarter amounted to 10.4 million tonnes, a decrease of 32% on Q2 2013. Ore tonnes mined from open pits amounted to 1.9 million tonnes compared to 1.5 million in Q2 2013, driven by the increased focus on mining ore at Buzwagi due to the change in the mine plan, partially offset 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 Q2 2013 primarily driven by reduced throughput at Buzwagi and at Bulyanhulu as discussed above. Head grade for the quarter of 3.2 grams per tonne (g/t) was 19% higher than in Q2 2013 (2.7 g/t). This was due to a higher mined grade at Buzwagi as mining focused on the main ore zone as per the revised mine plan, and an improvement in 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 to US$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 same period in 2013); lower G&A costs driven by lower freight costs and aviation charges at Bulyanhulu and North Mara; increased supplier discounts; and lower consumables costs driven by lower reagents and grinding media costs at North Mara and lower tyres and grinding media costs at Buzwagi. This was partially offset by lower capitalised development costs at Buzwagi and North 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% lower than 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 to US$103.3 million in Q2 2013. Capital expenditure mainly consisted of capitalised development expenditure (US$35.8 million), including US$4.7 million related to waste development from the Bulyanhulu Upper East project and US$4.8 million relating to the Bulyanhulu Deep West project, investment in the Bulyanhulu CIL Expansion project (US$10.1 million), investments in tailings and infrastructure (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$('000) 10,972 29,678 25,831 52,421 Capital expenditure 30,464 49,453 58,727 92,069 - Non-cash reclamation asset adjustments US$('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 availability of high grade stopes. Tonnes hoisted and throughput were both impacted by the disruption of mining operations for approximately two weeks in May as a result of the search for a missing underground employee who was subsequently found deceased as a result of a non-operational incident. Gold ounces sold of 52,044 ounces were 4% below that in Q2 2013 primarily due to the lower production base, but exceeded production for the quarter due to the sale of concentrate ounces on hand at the end of Q1 2014. Copper production of 1.1 million pounds for the quarter was 18% lower than in Q2 2013 due to lower throughput. Cash costs for the quarter of US$919 per ounce sold were 2% lower than the prior year of US$936, although they increased over Q1 2014 as a result of the lower production base and an increase in operating expenses to support the ramp up of production in the second half of the year. Against the prior year period, cash costs were positively impacted by lower general and administration costs primarily driven by lower freight costs, aviation charges, corporate charges and 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, higher cash costs and higher capitalised development costs as explained below. During the quarter, we progressed the commissioning of the new CIL circuit at Bulyanhulu and are nearing the completion of the commissioning stage. In late June, roughly 6,500 tonnes of rougher tails were treated and pumped into the new CIL circuit, resulting in 273 ounces of gold being produced in circuit. We expect commissioning of this project to be complete early in Q3 with the first gold pour in August. The ramp up of production will continue throughout the third quarter. We continue to expect production of 20,000 ounces in 2014 from the project, and are investigating an option for accelerating the retreatment of the historic higher grade tailings in preference to the rougher tailings. We undertook waste development in the Upper East Zone for a capital cost of US$4.7 million in Q2 2014 and will commence ore development as expected in Q3 2014. As a result, we expect production from the Upper East Zone of approximately 15,000 ounces of gold in H2 2014, weighted towards the fourth quarter. In addition, we have progressed the development of the Deep West Zone through a contractor to accelerate access to higher grade ore from Q4 2014, and have incurred underground development capital costs of US$4.8 million during the quarter. ABG expects that the combined capital requirements the Upper East Zone and Deep West Zone for 2014 will be approximately US$30 million. This is categorised as capitalised development and is included in the Bulyanhulu and Group AISC figures. Capital expenditure for the quarter of US$30.5 million was 38% lower than in Q2 2013 of US$49.5 million. Capital expenditure consisted mainly of capitalised underground development costs (US$17.2 million, inclusive of US$4.7 million of Upper East and US$4.8 million of Deep West spend) and expansionary capital investment 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 asset adjustments 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 Q2 2013, driven by increased head grade as a result of the re-engineered mine plan as 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 lagging production as a result of the availability and timing of copper concentrate shipments. We anticipate that the majority of the unsold ounces at the end of June 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 lower mill availability as a result of the re-lining of both the SAG and Ball mills in May, coupled with the limiting of daily throughput to manage a defective SAG mill gearbox ahead of a change out in early Q3. The management of the SAG mill gearbox meant that the process plant ran on 100% diesel power to ensure consistent power supply from May, although this has now reverted back to the normal power mix. Total tonnes mined for the quarter of 5.8 million tonnes were 32% lower than in Q2 2013 due to changes in the mine plan compared to 2013 due to the focus on the removal of less waste and mining of higher grade areas. Copper production of 2.3 million pounds for the quarter was 33% higher than in Q2 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 Q2 2013 (US$1,054). Cash costs were positively impacted by increased production levels and resultant co-product revenue, together with savings driven by the Operational Review in contracted services (lower rates) and labour costs (58% reduction in the international workforce). This was partially offset by lower capitalised development costs, increased power costs to run the process plant on self generated power, and increased maintenance costs due to increased maintenance 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 sustaining capital and capitalised development expenditure. Capital expenditure for the quarter of US$9.4 million was 57% lower than in Q2 2013 (US$21.9 million). The significant change to the mine plan reduced the levels of waste movement thereby reducing capitalised stripping costs. Key capital 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$('000) 978 376 978 504 Capital expenditure 18,660 31,830 34,458 53,383 - Non-cash reclamation asset adjustments US$('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 2013 despite the marginally lower head grade as throughput rates exceeded the prior year period by 12%. The higher milled tonnes were due to improved mill efficiency. Gold ounces sold for the quarter of 70,040 ounces were in line with production. Cash costs for the quarter of US$561 per ounce sold were 18% lower than in Q2 2013 (US$684). Cash costs were positively impacted by increased production levels, together with a 36% reduction in the international workforce and lower maintenance costs, both a result of initiatives driven by the Operational Review. This was partially offset by lower capitalised mining costs and higher contracted 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 sustaining capital and capitalised development expenditure in combination with the increased production base. During the second half of the year, North Mara is expected to mill an increased number of ore tonnes sourced from the lower grade Nyabirama pit rather than from the Gokona pit. As a result head grades for the full year are expected to revert towards the reserve grade of the mine. The feasibility study into the potential to mine Gokona Cut 3 via an underground operation continued to progress well during the quarter and is on track to be presented to the Board for approval in Q4 2014. During Q2, ABG made the final decision on the location of the exploration portal which will provide the opportunity to develop a better understanding of the ore body, initial access 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 the first blast due in August. The total expansionary capital cost of the portal is expected to be around US$10 million. Capital expenditure for the quarter of US$18.7 million was 41% lower than in Q2 2013 (US$31.8 million), due to lower capitalised development and lower sustaining capital expenditure, slightly offset by increased expansionary expenditure. 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 million relates to exploration drilling costs relating to the Gokona Underground feasibility study. Exploration Review Exploration during H1 2014 continued to focus on the Tanzanian near-mine and in-mine brownfield programmes and the West Kenya Joint Venture Greenfield programmes. Exploration expenditure for the first half of the year was approximately US$10.6 million and the full year forecast budget remains US$16.0 million. The 2014 exploration programmes have been weighted toward H1 2014, with large diamond core programmes from surface and underground platforms at Bulyanhulu, and extensive soil sampling, ground geophysics and Aircore drilling programmes across the West Kenya Joint Venture. In H2 2014, we expect to complete surface drilling on Bulyanhulu Deep West and Aircore drilling in Kenya. We will assess the results of H1 2014 programmes and design follow-up programmes to test positive results. The next phase of underground drilling at Bulyanhulu, which is targeting the deep western extension of Reef 2, commenced in early July. Bulyanhulu Deep West Surface Drilling Throughout H1 2014, we have continued a programme of deep diamond drilling West of the Bulyanhulu mine, targeting extensions of the Reef 1 and Reef 2 vein series. The holes are designed to test the extensions of the Reef 1 structure from 400 metres to 1,200 metres west of the current Bulyanhulu resource where historic drilling had shown indications of further gold mineralisation. Additionally, holes will also intersect the Reef 2 vein series, and provide an indication of whether the Reef 2 system is mineralised up to 2 kilometres west of currently delineated underground resources. During H1 2014, a total of 7,503 metres of diamond core has been drilled from the surface holes. The Reef 1 and Reef 2 system has been intersected in several holes during H1 2014, with better results being returned from Reef 2 in this part of the Bulyanhulu mineralised system. Encouraging results from the programme 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 that gold mineralisation, particularly on the Reef 2 vein system continues West of the mine, which would open the potential for an expansion of the footprint of Bulyanhulu on Reef 2. The drilling programme is expected to be completed during H2 2014 with a single rig drilling a further 2,500 metres of diamond core drilling. This programme will form an important part of our assessment of how to 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 the Bulyanhulu Reef 2 system which is outside the current resource model. The programme was drilled from several underground drill platforms and was aimed at adding high grade gold resources on the East Zone. Drilling was completed during H1 2014 with a total of 3,058 metres of diamond core completed from three holes, bringing the total for the programme to five holes at 5,598 metres. The results received were all from the Reef 2 series and included the following 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 mineralisation with high grade. This has the potential to add to the mine resource in this area, with the high grade shoot remaining open at depth. This stage of the programme has been completed and the results will be incorporated into the end of year resource calculations. Further drilling programmes are planned in this area and will be completed as part of a larger Reef 2 underground resource expansion 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 Liranda Corridor 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 programme has been very successful, with 247 holes of the 992 holes completed since the programme commenced in 2013 returning anomalous results (>0.1g/t Au), of which 87 holes intersecting zones of >0.50g/t Au including better results during H1 2014 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 along the Liranda Corridor, which indicates opportunities to test for different types and styles of gold deposits in this area. The majority of gold mineralisation intersected to date has been within weathered (oxidised) bedrock, often associated with quartz veining, but not always the case. The Aircore results to date are very encouraging given the current line spacing of the Aircore traverses varies between 200 metres and 800 metres and the average depth of drilling to date is relatively shallow at approximately 50 metres. Step-out and infill traverses are being undertaken as part of the current phase of the programme before targets will be ranked for testing by more advanced reverse circulation and diamond drilling. In tandem with the Aircore drilling we are undertaking gradient and pole-dipole IP and Resistivity across selected gold-in-soil anomalies throughout the Lake Zone Camp in the central and western areas of the project. A total of 147 line kilometres of surveys have now been completed. Ten targets showing distinct resistivity and/or chargeability zones coincident with the gold-in-soil anomalies have been delineated and will be considered as priority targets for future drilling programmes. Financial Review The positive impact of the Operational Review and the challenging gold price environment in 2014 is reflected in the ABG Group's financial results for the six months ended 30 June 2014 which also present Tulawaka as a discontinued operation: Revenue of US$445.5 million was US$41.9 million lower than H1 2013 driven by a 13% 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 an increase of 16,578 ounces (5%) in sales volumes. Cash costs decreased to US$752 per ounce sold from US$876 in H1 2013, driven by higher production, lower labour costs and contracted services. All-in sustaining costs decreased to US$1,118 per ounce sold from US$1,483 in H1 2013 due to lower cash costs, sustaining capital expenditures and capitalised development costs. EBITDA increased by 1% to US$131.6 million, mainly driven by lower direct mining costs achieved from the implementation of the Operational Review initiatives. Operational cash flow of US$127.1 million was 28% higher than H1 2013, mainly due to reduced operating costs and decreased working capital investment. The following review provides a detailed analysis of our consolidated results for the six months ended 30 June 2014 and the main factors affecting financial performance. It should be read in conjunction with the consolidated interim financial information and accompanying notes on pages 27 to 44, which have been prepared in accordance with International Financial Reporting Standards as adopted 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 Tulawaka Gold Mine ("Tulawaka") and certain exploration licenses surrounding Tulawaka for a consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at US$0.5 million. As part of the agreement, STAMICO took ownership and management of the rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future closure and rehabilitation liabilities for Tulawaka, and indemnified the other parties to the agreement in relation to these liabilities. This resulted in a cash payment by ABG to STAMICO of the balance of the rehabilitation fund, less the transaction consideration on completion. Tulawaka was 100% owned by the Tulawaka Joint Venture, in which ABG held a 70% economic interest through a wholly owned subsidiary, and MDN Inc held the remaining 30% of the Joint Venture. Production at Tulawaka ceased in Q2 2013. The transaction completed on 4 February 2014, resulting in a cash payment of US$11.6 million to STAMICO. The financial results of Tulawaka have been presented as discontinued operations in the consolidated interim financial information. The comparative results in the consolidated interim income statement have been presented as if Tulawaka had been discontinued from the start of the comparative period, effectively excluding the net result relating to Tulawaka from individual income statement lines and aggregating it in one line called "Net profit/(loss) from discontinued operations". Below is a reconciliation showing Group financial performance on a line by line basis. Six months ended 30 June 2014 Six months ended 30 June 2013 (US$'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 expense and 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$487.4 million). Year-on-year realised gold prices decreased by 13% to US$1,290 per ounce sold from US$1,480 in H1 2013, which more than offset the increase in sales volumes of 16,578 ounces. The increase in sales ounces was primarily due to the higher production base. Included in total revenue was co-product revenue of US$18.7 million for H1 2014, which decreased by 17% from the prior year period (US$22.7 million) due to the lower copper sales volumes and a lower realised copper price. The H1 2014 average realised copper price of US$3.07 per pound compared unfavourably to that of H1 2013 (US$3.23 per pound), and was driven by global market factors regarding 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$386.7 million). The key aspects impacting the cost of sales for the reporting period were lower direct mining costs as a result of Operational Review savings across labour, consumables and freight, a change in inventory credit driven by the investment in ore inventory and build up of ounces on hand and lower depreciation and amortisation charges driven by the lower capital base employed. The table below provides a breakdown of cost of sales: Three months ended Six months ended 30 (US$'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 at all operating sites, specifically a 29% reduction in group international employees, driven by localisation efforts and the impact of the Operational Review. A 6% reduction in energy and fuel expenses, driven primarily by lower diesel usage at North Mara as a result of reduced mining activity, and at Buzwagi as a result of reduced mining and processing activity. An 11% decrease in consumable costs, primarily due to supplier price negotiations, increased mine site efficiencies and lower mining activity. Maintenance costs of US$47.9 million were in line with prior year costs of US$47.7 million. A 15% decrease in contracted services, mainly driven by lower mining activity at Buzwagi, and the renegotiated maintenance rates associated with maintenance and repair contracts ("MARC") contracts at Buzwagi and North Mara. A 14% decrease in general administration costs, mainly at Bulyanhulu and North Mara driven by lower freight costs associated with inventory consumed, a decrease in the stock obsolescence provision and lower aviation charter costs driven by the Operational Review. Capitalised direct mining costs, consisting of capitalised development costs and the change in inventory charge, is comprised as follows: Three months ended 30 (US$'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 increased focus on mining ore at Buzwagi due to the revised mine plan. The investment in inventory was US$25.6 million higher than in H1 2013 due to a build up of ore inventory at Buzwagi due to lower throughput rates combined with increased gold inventory on hand driven by the timing of production compared to sales. This was slightly offset by a drawdown of ore stockpiles at North Mara as a result of the improved throughput rate and plant performance. Corporate administration costs Corporate administration expenses totalled US$18.9 million for H1 2014. A US$3.6 million decrease in general corporate administration costs due to the impact of the Operational Review was more than offset by an increase of US$8.8 million in share based payment expenses given the stronger share price performance. This resulted in a 38% increase on H1 2013 (US$13.7 million) as shown in the table below. Three months ended 30 Six months ended 30 June June (US$'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 H1 2014 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 to US$3.3 million. The Bulyanhulu underground programme has been completed in H1 2014 and the second half of the year should see decreased field activity across all projects. Corporate social responsibility expenses Corporate social responsibility costs incurred amounted to US$4.3 million for the six months compared to the prior year of US$6.2 million. The main projects for H1 2014 related to Village Benefit Implementation Agreements ("VBIAs") at North Mara and contributions to general community projects funded from the ABG Maendeleo Fund. Other charges Other charges amounted to US$12.8 million, 18% lower than H1 2013 (US$15.6 million). The main contributors were: (i) non-cash foreign exchange losses mainly related to the indirect tax receivables due to the weakening of the Tanzanian shilling (US$7.8 million), (ii) Operational Review costs, including external services and retrenchment costs of US$5.3 million, (iii) legal costs of US$1.9 million, and (iv) ABG's entry into zero cost collar contracts as part of a programme to protect it against copper, silver, rand and fuel cost market volatility. The entry into these arrangements resulted in a combined mark-to-market revaluation gain of US$2.7 million, due to the fact that these arrangements do not qualify for hedge accounting. Refer to note 7 of the consolidated 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$4.7 million). The key drivers were US$1.2 million (US$1.5 million in 2013) relating to the servicing of the US$150 million undrawn revolving credit facility, and accretion expenses relating to the discounting of the environmental reclamation liability (US$2.5 million). Other costs include bank charges and interest on finance leases. Interest costs relating to the project financing on the CIL Bulyanhulu Expansion project are capitalised to the cost of the asset due to the facility being directly attributable to the asset. For the six months ended 30 June 2014 US$2.0 million of borrowing costs have been capitalised to the project. Finance income relates predominantly to interest charged on non-current receivables and interest received on money market funds. Refer to note 8 of the consolidated interim financial information for details. Taxation matters The taxation charge was US$22.7 million for H1 2014, compared to a credit of US$184.6 million in H1 2013. The tax charge was made up solely of deferred tax charges 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 H1 2013. The increase is mainly driven by the increase in taxable income, and temporary higher tax losses for corporate and exploration entities in Q2 2014 for which deferred tax assets are not recognised. This is expected to normalise in H2 2014. Net earnings from continuing operations As a result of the factors discussed above, net profit from continuing operations for H1 2014 was US$39.5 million, against the prior year period loss of US$672.7 million. Lower impairment charges, costs of sales, and other charges contributed to the variance. This was offset by the higher tax charge and lower revenue. Earnings per share The earnings per share for H1 2014 amounted to US10.0 cents, an increase of US181.0 cents from the prior year period loss of US171.0 cents. The increase was driven by an increased net profit with no change in the underlying issued shares. 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$876 per ounce). Refer to the operating overview on page 7 and cost of sales explanations as part of the financial review for the details on the year on year change. The table below provides a reconciliation between cost of sales and total cash cost to calculate the cash cost per ounce sold. Three months ended Six months ended 30 (US$'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 a reconciliation 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$130.8 million) as a result of the lower cost of sales and other charges, partly offset by lower revenue and higher corporate administration costs. A reconciliation between net profit for the period and EBITDA is presented below: Three months ended 30 Six months ended 30 (US$'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 June 2014 (US$320.9 million as at 30 June 2013). The Group's cash and cash equivalents are with counterparties whom the Group considers to have an appropriate credit rating. Location of credit risk is determined by physical location of the bank branch or counterparty. Investments are held mainly in United States dollars and cash and cash equivalents in other foreign currencies are maintained for operational requirements. During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of our key growth projects, the Bulyanhulu CIL Expansion 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. The seven year Facility is repayable in equal instalments over the term of the Facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The full facility of US$142 million was drawn in 2013. The above compliments the existing undrawn revolving credit facility of US$150 million which runs until November 2016. The net book value of property, plant and equipment increased from US$1.28 billion in December 2013 to US$1.35 billion in June 2014. The main capital expenditure drivers have been explained in the cash flow used in the investing activities section below, and have been offset by depreciation charges of US$64.7 million. Refer to notes 6 and 12 to the consolidated interim financial information for further details. Total indirect tax receivables, net of a discount provision applied to the non-current portion, decreased from US$159.8 million as at 31 December 2013 to US$126.6 million as at 30 June 2014. The decrease was mainly due to refunds of US$65.8 million received during H1 2014, which was offset by a net increase in current VAT receivables of approximately US$37 million. The net deferred tax position decreased from an asset of US$14.9 million as at 31 December 2013 to a liability of US$7.8 million. This was mainly driven by the reduction in deferred tax assets as a result of the company making taxable income. Net assets attributable to owners of the parent increased from US$1.93 billion in December 2013 to US$1.96 billion in June 2014. The increase reflects the current year profit attributable to owners of the parent of US$40.8 million and the payment of the final 2013 dividend of US$8.2 million to shareholders during H1 2014. Cash flow generation and capital management Cash flow - continuing and discontinued operations For the three months ended 30 For six months (US$'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, an increase of US$28.1 million, when compared to H1 2013 (US$99.0 million). The increase primarily relates increased EBITDA, slightly offset by an investment in working capital. The working capital investment of US$3.8 million related mainly to a decrease in trade payables of US$16.4 million due to the timing of payments combined with an investment in gold inventory of US$14.6 million. This was offset by VAT refunds of US$28.2 million received from the Tanzanian Government. Cash flow used in investing activities was US$128.1 million for H1 2014, a decrease of 39% when compared to H1 2013 (US$208.8 million), driven by lower sustaining capital expenditure across all sites, lower expansion capital expenditure mainly related to the Bulyanhulu CIL Expansion project and lower capitalised development expenditure at Buzwagi and North Mara. A breakdown of total capital and other investing capital activities for the six months ended 30 June is provided below: (US$'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 accruals excluded from cash sustaining capital. 2 Non-current asset movements relates to the investment in the land acquisitions reflected as prepaid operating leases and Tanzania government receivables. Sustaining capital Sustaining capital expenditure included the investment in mine equipment of US$6.7 million, mainly relating to component change outs at North Mara and Buzwagi and investment in tailings and infrastructure at North Mara (US$3.4 million), Bulyanhulu (US$3.2 million), and Buzwagi (US$3.0 million). Expansionary capital Expansionary capital expenditure consisted mainly of the Bulyanhulu CIL Expansion 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 capitalised underground development of US$28.4 million. Non-cash capital Non-cash capital was US$13.2 million and consisted of reclamation asset adjustments (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 free rates driving lower discount rates. Other investing capital The sale of Tulawaka to STAMICO resulted in a cash payment of the balance of the rehabilitation fund, less the transaction consideration on completion, and amounted to US$11.6 million. During H1 2014 North Mara incurred land purchases totalling US$5.3 million. Cash flow used in financing activities for the six months ended 30 June 2014 was US$11.1 million, a decrease of US$38.7 million on H1 2014 (US$27.6 million inflow). The outflow primarily relates to payment of the final 2013 dividend of US$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 shareholders during May 2014. The Board of Directors have approved an interim dividend for 2014 of US1.4 cents per share, payable to shareholders in September 2014. Significant judgements in applying accounting policies and key sources of estimation uncertainty Many of the amounts included in the consolidated interim financial statements require management to make judgements and/or estimates. These judgements and estimates are continuously evaluated and are based on management's experience and best knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the consolidated financial information included in this release. Information about such judgements and estimation is included in the accounting policies and/or notes to the consolidated interim financial statements, and the key areas are summarised below. Areas of judgement and key sources of estimation uncertainty that have the most significant effect on the amounts recognised in the consolidated interim financial 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, the determination of whether these assets are impaired and the measurement of impairment 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 the measurement of depreciation expense; Property, plant and equipment held under finance leases; Recognition of a provision for environmental rehabilitation and the estimation of the rehabilitation costs and timing of expenditure; Whether to recognise a liability for loss contingencies and the amount of any such provision; Whether to recognise a provision for accounts receivable and the impact of discounting the non-current element; Recognition of deferred income tax assets, amounts recorded for uncertain tax positions, 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 associated net realisable value and the split between the long term and short term portions; Determination of fair value of derivative instruments; and Determination of fair value of stock options and cash-settled share based payments. Going concern statement The ABG Group's business activities, together with factors likely to affect its future development, performance and position are set out in the operational and financial review sections of this report. The financial position of the ABG Group, its cash flows, liquidity position and borrowing facilities are described in the preceding paragraphs of this financial review. At 30 June 2014, the Group had cash and cash equivalents of US$269.6 million with a further US$150 million available under the undrawn revolving credit facility which has been further extended until November 2016. Total borrowings at the end of the year amounted to US$142 million, of which the first repayment is only repayable from 2015. Included in other receivables are amounts due to the Group relating to indirect taxes 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 taxes incurred during 2014. The refunds remain dependent on processing and payments of refunds by the Government of Tanzania. We expect that the above, in combination with the expected operational cash flow generated during the year, will be sufficient to cover the capital requirements and other commitments for the foreseeable future. In assessing the ABG Group's going concern status the Directors have taken into account the above factors, including the financial position of the ABG Group and in particular its significant cash position, the current gold and copper price and market expectations for the same in the medium term, and the ABG Group's capital expenditure and financing plans. After making appropriate enquiries, the Directors consider that ABG and the ABG Group as a whole has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to adopt the going concern basis in preparing the consolidated interim financial statements. Non-IFRS Measures ABG has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing ABG's financial condition and operating results. These measures are not in accordance with, or a substitute for, IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures are explained further below. Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue: Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and Export duties. Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility 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 and manage those factors that impact production costs on a monthly basis. Cash cost per ounce sold is calculated by dividing the aggregate of these costs by gold ounces sold. Cash costs and cash cost per ounce sold are calculated on a consistent basis for the periods presented. All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is in accordance with the World Gold Council's guidance issued in June 2013. It is calculated by taking cash cost per ounce sold and adding corporate administration 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 capital expenditure. This is then divided by the total ounces sold. A reconciliation between 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 cost for each ounce sold, taking into account expenditure incurred in addition to direct mining costs, depreciation and selling costs. Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties, by-product credits, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Cash costs per tonne milled are calculated by dividing the aggregate of these costs by total tonnes milled. EBITDA is a non-IFRS financial measure. ABG calculates EBITDA as net profit or loss for the period excluding: Income tax expense; Finance expense; Finance income; Depreciation and amortisation; 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 be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently. EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for depreciation and amortisation and goodwill impairment charges. Mining statistical information The following describes certain line items used in the ABG Group's discussion of key performance indicators: Open pit material mined - measures in tonnes the total amount of open pit ore and waste mined. Underground ore tonnes hoisted - measures in tonnes the total amount of underground ore mined and hoisted. Total tonnes mined includes open pit material plus underground ore tonnes hoisted. Strip ratio - measures the ratio of waste-to-ore for open pit material mined. Ore milled - measures in tonnes the amount of ore material processed through the mill. Head grade - measures the metal content of mined ore going into a mill for processing. Milled recovery - measures the proportion of valuable metal physically recovered in the processing of ore. It is generally stated as a percentage of the metal recovered compared to the total metal originally present. Risk Review We have made a number of further developments in the identification and management of our risk profile over the course of H1 2014 and where appropriate, risk ratings have been reviewed against risk management controls and other mitigating factors. Our principal risks continue to fall within four broad categories: strategic risks, financial risks, external risks and operational risks and, while the overall makeup of our principal risks has not significantly changed from that published in the 2013 Annual Report, there have been changes in certain risk profiles as a result of developments in our operating environment, in particular enhancements made to operating and planning practices, and continuing uncertainties and trends within the wider global economy and/or the mining industry. This has resulted in the following risks being removed from those risks previously viewed as principal risks to ABG and its operations: (i) costs and capital expenditure; (ii) utilities supply; (iii) land acquisitions; and (iv) loss of critical processes. Further details of these risks are provided in the 2013 Annual Report. In conjunction with this, we believe it appropriate to add a new risk as a principal risk for the remainder of 2014, this being safety risks relating to mining operations. This is due to the fact that, despite the significant health, safety and risk management systems that ABG has in place for its underground and surface mining operations, mining and in particular underground mining is subject to a number of hazards and risks in the workplace, such as fall of ground relating to underlying 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 our principal 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 mining operations is provided above. Further detail as regards all other principal risks 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 consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R and Disclosure and Transparency Rule 4.2.8R, namely: an indication of important events that have occurred during the first six months of the financial year and their impact on the consolidated interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and material related-party transactions in the first six months of the financial year and any material changes in the related party transactions described in the last Annual Report. The Directors of African Barrick Gold plc are listed in the African Barrick Gold plc Annual Report for 31 December 2013. A list of current Directors is maintained 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 six months ended 30 June 2014. Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. This conclusion is to be read in the context of what we say in the remainder of this report. What we have reviewed The condensed consolidated interim financial information, which are prepared by African Barrick Gold plc, comprise: the consolidated balance sheet as at 30 June 2014; the consolidated income statement and statement of comprehensive income for the period 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 financial information. As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed consolidated interim financial information included in the half-yearly financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. What a review of condensed consolidated financial information involves We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information. Responsibilities for the condensed consolidated interim financial information and the review Our responsibilities and those of the directors The half-yearly financial report, including the condensed consolidated interim financial information, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial information in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. PricewaterhouseCoopers LLP Chartered Accountants, London 24 July 2014 Notes: The maintenance and integrity of the African Barrick Gold Plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of 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 ASSETS Non-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 is listed on the London Stock Exchange and incorporated and domiciled in the UK. It is registered in England and Wales with registered number 7123187. The address 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 the Company and is the ultimate controlling party of the Group. This condensed consolidated interim financial information for the six months ended 30 June 2014 were approved for issue by the Board of Directors of the company on 24 July 2014. The condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013 were approved by the Board of Directors on 11 March 2014 and delivered to the Registrar of Companies. The report of the auditors' on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The condensed consolidated interim financial information has been reviewed, not audited. The Group's primary business is the mining, processing and sale of gold. The Group has three operating mines located in Tanzania. The Group also has a portfolio 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 months ended 30 June 2014 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in accordance with IFRS as adopted by the European Union. The condensed consolidated interim financial information has been prepared under the historical cost basis, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. The financial information is presented in US dollars (US$) and all monetary results are rounded to the nearest thousand (US$'000) except when otherwise indicated. Where a change in the presentational format between the prior period and the current period financial information has been made during the period, comparative figures have been restated accordingly. The following presentational changes were made during the current period: Presentation of the results of discontinued operations due to the sale of Tulawaka mine to STAMICO, the Tanzanian State Mining Corporation. Refer to note 5 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 interest rate risk and price risk), credit risk and liquidity risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements as at 31 December 2013. There have been no changes in the risk management department or in any risk management policies since the year end. The impact of the seasonality on operations is not considered as significant on the condensed consolidated interim financial information. After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing the consolidated interim financial information. Refer page 22 for the Going Concern statement. ACCOUNTING POLICIES The accounting policies adopted are consistent with those used in the African Barrick Gold plc annual financial statements for the year ended 31 December 2013 except as described below. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. IFRS 10, 'Consolidated financial statements', IFRS 11, 'Joint arrangements' and IFRS 12 'Disclosures of interests in other entities'. The adoption of these standards has had no effect on the financial statements for earlier periods and on the interim financial statements for the period ended 30 June 2014 and is not expected to have a significant effect on the results for the financial year ending 31 December 2014. IFRIC 21 'Levies'. IFRIC 21 addresses the accounting for a liability to pay a levy if that liability is within the scope of IAS 37 'Provisions'. The interpretation addresses what the obligating event is that gives rise to pay a levy, and when should a liability be recognised. The group is not currently subject to significant levies. The adoption of the interpretation has had no significant effect on the financial statements for earlier periods and on the interim financial statements for the period ended 30 June 2014. The group does not expect IFRIC 21 to have a significant effect on the results for the financial year ending 31 December 2014. There are no other new standards, interpretations or amendments to standards issued 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 make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2013, with the exception of changes in estimates that are required in determining 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 the Tulawaka Gold Mine ("Tulawaka") and certain exploration licences surrounding Tulawaka for consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at US$0.5 million. On 4 February 2014, ABG announced the completion of the sale. STAMICO has taken ownership and management of the rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future closure and rehabilitation liabilities for Tulawaka, and has indemnified the other parties to the agreement in relation to these liabilities. The transfer was completed with a net cash payment of US$11.6 million by ABG to STAMICO for the balance of the rehabilitation fund, less the transaction consideration. This resulted in a net gain on sale of assets of US$4.1 million. After non operational costs incurred in the six months to 30 June 2014 and other closing adjustments, this resulted in a total cash outflow year to date of US$14.4 million. The financial results of Tulawaka have been presented as discontinued operations in the consolidated interim financial information. The comparative results in the consolidated interim income statement have been presented as if Tulawaka had been discontinued from the start of the comparative period. Below is a summary of the results of Tulawaka for the six months ended 30 June 2014 and 30 June 2013, and year ended 31 December 2013: For the year ended For the six months 31 ended 30 June December (Unaudited) (Unaudited) (Audited) (US$'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 from the ABG Maendeleo Fund. 2 Other charges consist of non-operational costs incurred since the cessation of operations. Segment Reporting The Group has only one primary product produced in a single geographic location, being gold produced in Tanzania. In addition the Group produces copper and silver as a co-product. Reportable operating segments are based on the internal reports provided to the Chief Operating Decision Maker ("CODM") to evaluate segment performance, decide how to allocate resources and make other operating decisions. After applying the aggregation criteria and quantitative thresholds contained in IFRS 8, the Group's reportable operating segments were determined to be: North Mara gold mine; Tulawaka gold mine; Bulyanhulu gold mine; Buzwagi gold mine; and a separate Corporate and Exploration segment, which primarily consist of costs related to corporate administration and exploration and evaluation activities ("Other"). Segment results and assets include items directly attributable to the segment as well as those that can be allocated on a reasonable basis. Segment assets consist primarily of property, plant and equipment, inventories, other assets and receivables. Capital expenditures comprise additions to property, plant and equipment. Segment liabilities are not reported since they are not considered by the CODM as material to segment performance. The Group has also included segment cash costs. Segment information for the reportable operating segments of the Group for the six months ended 30 June 2014 and 30 June 2013, and year ended 31 December 2013 is 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 social responsibility 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 social responsibility 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 social responsibility 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 sites separately 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 meaning under 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 adding back debt and intercompany liabilities, and subtracting cash and intercompany assets and include outside shareholder's interest. 6 Represents Tulawaka which has been discontinued. 7 Depreciation and amortisation includes the depreciation component of the cost of inventory sold. 8 Sustaining capital expenditure for the purposes of all-in sustaining cost per ounce sold includes land purchases which are classified as long term prepayments 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 rehabilitation provision. 2 Included in credit facility charges are the amortisation of the fees related to the revolving credit facility as well as the monthly interest and facility fees. 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$'000) 2014 2013 Restated1 2013 Current tax: Current tax on profits for the period - 28 - Adjustments in respect of prior years - - 40 Total current tax - 28 40 Deferred tax: Origination and reversal of temporary differences 22,716 (184,676) (187,999) Total deferred tax 22,716 (184,676) (187,999) Income tax expense/(credit) 22,716 (184,648) (187,959) 1 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5. The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follow: For the year For the six months ended ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'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") in respect of income taxes for 5 years following the date of the filling of the corporate tax return, during which time the authorities have the right to raise additional tax assessments including penalties and interest. Under certain circumstances the reviews may cover longer periods. Because a number of tax periods remain open to review by tax authorities, there is a risk that transactions that have not been challenged in the past by the authorities may be challenged by them in the future, and this may result in the raising of additional tax assessments plus penalties and interest. The Group has previously accounted for an adjustment to unrecognised tax benefits in respect of tax losses to reflect uncertainty regarding recoverability of certain tax losses. The Group makes no further provision in respect of such potential tax assessments. Earnings/ (LOSS) per share Basic earnings/ (loss) per share ("EPS") is calculated by dividing the net profit/ (loss) for the period attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the period. Diluted earnings/ (loss) per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential Ordinary Shares. The Company has dilutive potential Ordinary Shares in the form of stock options. The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of stock options. At 30 June 2014, 30 June 2013 and 31 December 2013, (loss)/earnings per share have 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 Restated Earnings/(loss) Net profit/(loss) from continuing operations attributable to owners 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 410,279,662 410,085,499 410,085,499 earnings 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 from discontinued 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 of US$8.2 million (US2.0 cents per share) was paid during 2014. 12. Property plant and equipment Mineral properties Assets For the six months ended 30 June 2014 and mine under (Unaudited) Plant and development construction (US$'000) equipment costs ¹ Total At 1 January 2014, net of accumulated depreciation 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 Assets ended 30 June 2013 properties and under (Unaudited) Plant and mine development construction (US$'000) equipment costs ¹ Total At 1 January 2013, net of accumulated depreciation and impairment 945,118 819,063 210,859 1,975,040 Additions - - 186,928 186,928 Impairments (510,650) (235,975) (36,876) (783,501) Depreciation (54,907) (35,446) - (90,353) Transfers between categories 74,457 104,360 (178,817) - At 30 June 2013 454,018 652,002 182,094 1,288,114 At 1 January 2013 Cost 1,475,374 1,250,088 210,859 2,936,321 Accumulated depreciation and impairment (530,256) (431,025) - (961,281) Net carrying amount 945,118 819,063 210,859 1,975,040 At 30 June 2013 Cost 1,549,580 1,354,447 218,970 3,122,997 Accumulated depreciation and impairment (1,095,562) (702,445) (36,876) (1,834,883) Net carrying amount 454,018 652,002 182,094 1,288,114 Mineral properties Assets and mine under (Audited) Plant and development construction (US$'000) equipment costs ¹ Total For the year ended 31 December 2013 At 1 January 2013, net of accumulated depreciation and impairment 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 expenditures incurred constructing tangible fixed assets related to operating mines and advance deposits made towards the purchase of tangible fixed assets; and (b) expansionary expenditure allocated to a project on a business combination or asset acquisition, and the subsequent costs incurred to develop the mine. Once these assets are ready for their intended use, the balance is transferred to plant and equipment, and/ or mineral properties and mine development costs. The gain on disposal of assets reflected in the income statement relates to the assets disposed of in the sale of Tulawaka which were transferred to assets held for sale in the year ended 31 December 2013. Leases Property, plant and equipment includes assets relating to the design and construction costs of power transmission lines and related infrastructure. At completion, ownership was transferred to TANESCO in exchange for amortised repayment in the form of reduced electricity supply charges. No future lease payment obligations are payable under these finance leases. Property, plant and equipment also includes emergency back-up and spinning power 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. The lease has been classified as a finance lease. Property, plant and equipment further includes drill rigs leased at Buzwagi mine under a one year rent to own lease agreement. The lease has been classified as a finance lease. The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease: For the six months ended For the year ended 30 June 31 December (Unaudited) (Unaudited) (Audited) (US$'000) 2014 2013 2013 Cost - capitalised finance leases 70,764 68,846 70,764 Accumulated depreciation (16,836) (17,065) (16,430) Net carrying amount 53,928 51,781 54,334 13. Derivative financial instruments The table below analyses financial instruments carried at fair value, by valuation method. The Group has derivative financial instruments in the form of economic and cash flow hedging contracts which are all defined as level two instruments as they are valued using inputs other than quoted prices that are observable for the assets or liabilities. The following tables present the group's assets and liabilities that are measured at fair value at 30 June 2014, 30 June 2013 and 31 December 2013. Assets Liabilities Net (Unaudited) fair (US$'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 the costs of the construction of one of our key growth projects, the Bulyanhulu CIL Expansion 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. The seven year facility is repayable in equal instalments over the term of the facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The full facility of US$142 million was drawn in 2013. Interest incurred on the borrowings has been capitalised 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 following commitments 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 by the Group due to one or more of the following: unlawful eviction, termination of services, wrongful termination of contracts of service, non-payment for services, defamation, negligence by act or omission, unpaid overtime and public holiday compensation. The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$163.6 million. The Group's Legal Counsel is defending the Group's current position, and the outcome of the lawsuits cannot presently be determined. 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 of account. Included in the total amounts claimed is an appeal by the TRA intended for a tax assessment of US$21.3 million in respect of the acquisition of Tusker Gold Limited. The case was awarded in favour of ABG however, the TRA has served a notice of appeal. The calculated tax assessment is based on the sales price of the 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 fact that the acquisition was for Tusker Gold Limited, a company incorporated in Australia. The shareholding of the Tanzanian-related entities did not change and the Tusker Gold Limited group structure remains the same as prior to the acquisition. Also included in the total amounts claimed is TRA claims to the value of US$41.25 million for withholding tax on historic offshore dividend payments paid by ABG to its shareholders. In addition to the claim, there are six other withholding tax claims which have not been quantified. These claims are made on the basis that ABG is resident in Tanzania for tax purposes. Management are of the opinion that the claims do not have substance and that they will be successfully defended. b) Tax-related contingencies The TRA has issued a number of tax assessments to the Group relating to past taxation years from 2002 onwards. The Group believes that these assessments are incorrect and has filed objections to each of them. The Group is attempting to resolve these matters by means of discussions with the TRA or through the Tanzanian appeals process. During the year under review the Board ruled in favour of BGML in relation to seven of ten issues raised by the TRA in final assessments for the 2000-2006 years under review. The TRA filed a notice of intention to appeal against the ruling of the Board, while ABG has filed a counter appeal in respect of Bulyanhulu to the Appeals Tribunal for all three items that were lost. The positions that were ruled against BGML were sufficiently provided for in prior year results and management is of the opinion that open issues will not result in any material liabilities to the Group. RELATED PARTY BALANCES AND TRANSACTIONS The Group has related party relationships with entities owned or controlled by Barrick Gold Corporation, which is the ultimate controlling party of the Group. The Company and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and service transactions and other professional services arrangements with others in the Barrick Group. These transactions are under terms that are on normal commercial terms and conditions. These transactions are not considered to be significant. At 30 June 2014 the Group had no loans of a funding nature due to or from related 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 per share for this financial year to be paid on 22 September 2014 to shareholders on the register on 29 August 2014.