By Alex MacDonald

LONDON--African Barrick Gold PLC (ABG.LN), Tanzania's largest gold producer, said Tuesday that fourth quarter gold production dropped on the year but still beat its full-year production and cash cost guidance as it continues to focus on implementing its turnaround plan amid a lower gold price environment.

The U.K.-based miner said fourth quarter gold production dropped 8.5% to 165,374 troy ounces compared with the same quarter a year before, largely due to lower grades at its Buzwagi mine, reduced throughput at its North Mara mine due to planned plant maintenance and the cessation of gold production at its Tulawaka mine.

But gold production rose 2.5% to 641,931oz in 2013, marking the company's first annual gold output rise since it was spun off from its parent company, Barrick Gold Corp. (ABX), in 2010. The annual figure was also 7% above the upper end of the company's guidance range of 540,000-600,000 ounces for 2013.

"We comfortably exceeded the top end of our initial production guidance range for 2013 due to strong performances from North Mara and Buzwagi and saw cash costs come in 10% below the bottom of the initial cash cost guidance range," Chief Executive Officer Brad Gordon said in a statement. The company's initial cash cost dropped 12% on the year to $827/oz, below its guidance range of $925 to $975 per ounce of gold.

African Barrick Gold has been buffeted by high costs and production delays since listing its shares in 2010. In August it appointed a new CEO to accelerate the company's turnaround given the lower gold price environment. Gold dropped 28% last year, marking its worst performance in about three decades as investors lost faith in the yellow metal as a store of value.

Mr. Gordon also said the company delivered its fifth consecutive reduction in quarterly all-in sustaining costs. The company's all-in sustaining costs--which takes into account both operating costs and capital expenditure costs--dropped 30% on the year to $1,171 per ounce.

Mr. Gordon said its flagship Bulyanhulu mine continues to improve and the Environmental Protection Order at North Mara has been lifted, thereby removing a constraint on the mine. African Barrick also reached an agreement with Tanzania's state-owned mining company STAMICO to transfer the Tulawaka mine in the first quarter of this year.

Write to Alex MacDonald at alex.macdonald@wsj.com

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