African Barrick Adds to CEO Departures

U.S. jobs data will be reported today, and investors remained cautious awaiting the news.

This week saw another change in top management at a major gold producer, this time at Tanzania’s largest gold company, African Barrick Gold (LSE:ABG). ABG said on Wednesday that Australian Bradley Gordon, formerly with Intrepid Mines (TSX:IAU), will man the company tiller, taking over from Greg Hawkins who has “resigned to pursue other opportunities.”

The CEO switch follows African Barrick’s failure earlier this year to sell a 75 percent stake of the company to China National Gold Group after talks collapsed in January.

The CEOs of Kinross (TSX:K, NYSE:KGC), Barrick (TSX:ABX, NYSE:ABX), Newmont (NYSE:NEM) and AngloGold Ashanti (NYSE:AU) have all exited the corner office in recent months amid a falling gold price and escalating costs.

In a commentary, Mineweb’s Lawrence Williams interprets Hawkins’ resignation as fallout from ABG’s poor performance since it was spunoff from parent company Barrick Gold and listed on the London Stock Exchange three years ago:

“Thus, Hawkins is the latest gold mining company CEO to be ousted, in this case to see if new blood can revitalise the ailing African gold miner. African Barrick stock has lost 73% of its value since its launch in 2010 and, although part of this fall is attributable to the plunging gold price and so outside management control, Hawkins is seemingly carrying the can for the company’s continual underperformance,” Williams wrote.

 Other company news

Johannesburg-based Gold Fields (NYSE:GFI) said on Thursday that despite incurring a second-quarter loss of $129 million, it will buy three Australian mines from Barrick: Granny Smith, Lawlers and Darlot. The cash and stock deal will add 452,000 ounces to GFI’s annual production profile and make it Australia’s third largest gold producer.

Sibanye Gold (NYSE:SBGL), a spinoff from Gold Fields, announced Wednesday that it will acquire the West Rand operations of junior miner Gold One International (ASX:GDO) for 150 million shares, Reuters reported. Gold One’s underground and surface operations west of Johannesburg are expected to add about 260,000 ounces a year to Sibanye’s production over the next five years. The mine also produces uranium as a byproduct.

Turquoise Hill Resources (TSX:TRQ, NYSE:TRQ), a subsidiary of Rio Tinto (LSE:RIO, ASX:RIO, NYSE:RIO) that is developing the Oyu Tolgoi copper-gold complex in Mongolia, said this week it is selling its majority stake in an Australian mining firm to a private Chinese coal company. Shanxi Donghui Coal Coking & Chemicals Group Co., Ltd. is offering $160 million for Inova Resources, which is 56.2 percent owned by Turquoise Hill. Inova owns two copper and gold mines and a molybdenum and rhenium deposit in Queensland.

Junior company news

Seabridge Gold (TSX:SEA), which is developing the huge KSM copper-gold project in British Columbia, announced Tuesday the results from three holes testing for high-grade core below the Iron Cap deposit. “The evidence strongly suggests that the Iron Cap deposit sits above a high-grade core zone,” Seabridge explained in a release. The news comes just over a week after Seabridge announced discovery of a large core zone it named Deep Kerr. The company’s stock has risen 14.5 percent over the past 5 days.

Guyana Precious Metals (TSXV:GPM) said Thursday it completed the previously announced acquisition of DPG Resources, based in Ontario. Guyana is purchasing all 18.7 million shares of DPG plus warrants. After the amalgamation GPM said it will hold about $4.8 million in cash. The company has a 100 percent interest in two of four past gold producers in Guyana.

Canamex Resources Corp. (TSXV:CSQ) released drill results from its Bruner gold project in Nevada. CSQ said it intersected a high-grade structure grading 30.7 grams per tonne (GPT) within a wider zone averaging 7.2 GPT over 9.1 meters.

“We continue to intersect stockwork gold mineralization in all holes drilled into the Penelas East target. There appears to be a lower grade stockwork zone surrounding the high-grade structure(s), which should allow for considering open pit mining of this gold zone,” COO Greg Hahn said.

Tarsis Resources (TSXV:TCC) started exploring its Yago gold-silver property in Mexico, which it recently acquired from Almaden Minerals (TSX:AMM). “Sporadic exploration has been carried out within both target areas by a number of different junior operators between 1998 and 2007. The culmination of this work at La Sarda and La Tejona has identified surface and subsurface mineralization intermittently over 3 km2 and 2.5 km2, respectively,” Tarsis stated.

Gold price update

Gold continued its upward trajectory after making gains last week, pushing past $1,370 an ounce despite a healthy U.S. dollar and continuing uncertainty regarding the U.S. Federal Reserve’s position on quantitative easing (QE). Gold started the week strong, hitting a two-month high on Monday before slipping back to $1,364.60 on the spot market. The yellow metal staged a comeback on Tuesday though, reaching $1,373 on a lower dollar ahead of the release of minutes from the Federal Reserve’s Open Market Committee. The FOMC has been signalling it plans to scale back QE, but Wednesday’s notes provided no clear consensus on when its $85 billion a month bond purchase program could end, allowing gold futures to finish the day up $2.60 at $1,375 an ounce. Choppy trading on Thursday amid a stronger dollar marked the precious metal down a few dollars, with spot gold ending the day at $1,372.50 and December gold at $1,371.90.

 

Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article. 

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