AngloGold Ashanti proceeding with streamlining


AngloGold Ashanti proceeding with streamlining

Published Date: 2019-08-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

AngloGold Ashanti proceeding with streamlining

The gold producer says it has received strong interest in its remaining SA gold mine after reporting a strong first-half performance.

AngloGold Ashanti says it has received strong interest for its remaining SA gold assets, including its Mponeng mine, as it streamlines its portfolio to concentrate its capital on projects delivering the highest returns. Separate sale processes are also underway for its holdings in the Cerro Vanguardia mine in Argentina and the Sadiola mine in Mali.

Despite plans to sell Mponeng, the mine contributed to a stronger second quarter for the gold producer, with a rise in production helping to compensate for a weak first quarter.

Releasing interim results, AngloGold said production improved by 7% in the three months to June from a quarter earlier. That lifted production for the six-month period to 1.55 million ounces, down 1.5% from a year earlier. It also lowered expenses, with a total cash cost of $792 an ounce, down from $807 previously. All-in sustaining costs improved by 2% year-on-year to $1,002 an ounce.

It said decreases from Sunrise Dam in Australia and Siguiri in Guinea, as well as a planned decrease in production from Cerro Vanguardia in Argentina, were offset by strong production improvements from Mponeng, Iduapriem in Ghana, Geita in Tanzania and Australia's Tropicana gold mine.

It received an average gold price of $1,302 an ounce in the second quarter, up 5% from the first three months. While the price subsequently averaged about $1,414 as of 4 August 2019, it said this wouldn't affect its focus.

Meanwhile, key projects remained on track and within budget. It said its Obuasi redevelopment project in Ghana remained a strategic priority and a key area of growth for the business, with work continuing towards meeting a tight schedule of achieving its first gold pour at the end of this year.

Headline earnings rose 21% to $120 million and headline earnings per share (HEPS) were up by the same margin at 29c. HEPS, which strip out certain once-off items, are the main profit measure in SA.

Earnings were given a $22 million boost from the previous year when it paid retrenchments costs related to the restructuring of its SA gold mines. An $11 million legal settlement from a Brazilian power utility added $11 million to earnings and income from joint ventures, mainly Kibali in the Democratic Republic of Congo, increased by $38 million.

The increases were partly offset by a $25 million decrease in net by-product revenue, mainly due to a decrease in silver sales and the silver price received. Environmental rehabilitation costs rose $27 million.

It said it had achieved four consecutive quarters and a total of 449 days without a fatality, a first in its history.

The group has guided on full-year production of between 3.25 million and 3.45 million ounces with total cash costs ranging between $730 and $780 per ounce.

Its shares closed 5.5% down at R302.48 on Thursday.

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