AngloGold Ashanti cushioned by gold price


AngloGold Ashanti cushioned by gold price


Published Date: 2021-05-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

AngloGold Ashanti cushioned by gold price

The gold mining company has reported a decline in first-quarter production as operations in Brazil and Ghana were impacted by Covid-19.

AngloGold Ashanti has reported a strong rise in first-quarter earnings thanks to a higher gold price. The gold producer has also continued its reinvestment programme aimed at completing the redevelopment of its Obuasi gold mine in Ghana and adding new gold reserves across its portfolio.

Production for the three-months to 31% March was 7% lower from the prior comparable period at 588,000 ounces and sales were down by the same margin. Solid production performances at its AGA Mineração, Serra Grande, Siguiri and Obuasi operations were offset by declines at other mines in its portfolio.

Covid-19 accounted for an estimated 4,000oz of lost production and an estimated $29/oz of all-in sustaining costs. Its Brazilian operations and Obuasi mine were most affected by the pandemic during the first quarter, with high rates of absenteeism affecting productivity in Brazil and ongoing challenges encountered in the rotation of expatriate workers from Australia to Ghana.

The company received an average $1,788 per ounce for its metal, up 13% from last year, while all-in sustaining costs per ounce rose 26% to $1,287. Gold income rose 8% to $956-million and it reported net profit of R203-million for the quarter, up 51%. Headline earnings rose 42% to $203-million, or 48c per share.

AngloGold Ashanti said 2021 and 2022 would be key investment years as it increased production from brownfields projects and built on strong reserve additions from exploration in 2020, to increase its overall reserve base and the life of its mines.

Construction at the Obuasi Redevelopment Project, which will transform the 20Moz high-grade gold ore body, initially placed on care and maintenance in 2016, into a top-tier gold producer, achieved 97% completion by the end of March. Production from the mine rose 53% to 46,000oz in the first quarter of 2021, from 30,000oz the prior quarter.

The company said it currently expected to meet its guidance for the full year. Its shares fell 1.6% to R319.29 yesterday.


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