[miningmx.com] — ANGLOGOLD Ashanti has managed to overcome torrential rainfall at its Australian and Namibian mines with strong operational performances in Africa and the USA, posting production figures in line with company targets.
Reporting quarterly figures to end-March on Wednesday, AngloGold also saw the financial benefits coming through from the closure of its hedge book last year.
Production was 1.039 million ounces (moz) at a total cash cost of $706/oz, compared to 1.148moz during the December quarter at $672/oz. Previous guidance for the quarter was 1.04moz at a cost of between $675/oz to $700/oz.
The higher-than-expected costs, according to CEO Mark Cutifani, were due to increased fuel prices, royalties (on the back of improved spot prices) and rand strength.
The headline earnings figure came in at $203m (53 US cents per share), compared to $61m during the previous corresponding period (adjusted for the hedge buy-back costs) and $294m to end-December.
Operating free from the shackles of its hedge book, AngloGold recorded cash flow generation of $513m. Its net debt position also improved by 15% to $1.1bn.
“The business is generating strong, steady cash flow now that we’re capturing this higher gold price,’ said Cutifani. “We’re now focused on driving operational improvements through the business and advancing our growth project.’
The best operational improvement were recorded at the group’s Cripple Creek & Victor assets (up 36%) in the US and Obuasi (up 6%) in Ghana, while the biggest production declines took place at Navachab (down 39%) in Namibia, Great Noligwa (35%) in South Africa as well as Sunrise Dam (29%) in Australia.
AngloGold also announced a significant new discovery beneath three current workings of its Sunrise Dam mine, which has the potential to yield between 2moz to 5moz. Drilling at its Cerro Vanguardia mine in Argentina also provided a high-grade interception of gold and silver at a depth of 400m, about 200m beneath where the current mineralisation was previously thought to end.
At La Colosa, in Colombia, drill results continued to confirm confidence in the potential of the ore body.
Guidance for the second quarter is 1.09moz at $760/oz, assuming an exchange rate of R6.75 to the dollar and a Brent crude price of $120 a barrel.
