This article is about African Barrick Gold (GM:ABGLF). African Barrick Gold has a market capitalization of around $700 million. It currently produces just under 600,000 ounces of gold annually. It has an enormous resource base of over 30 million ounces of gold at over three grams per ton. It also has around $400 million in cash.
In all on the surface African Barrick appears to be a steal at the current valuation.
However, there are several reasons for this valuation.
- First, the company is losing money at $1,330 gold.
- Second, the company's mines are located in Tanzania, and as a result shareholders incur substantial political risks.
- Third the company's production is in decline. It declined from 2011 to