ANGLOGOLD Ashanti is set fair for a strong production year in 2018 having racked up between 1.6 million to 1.75 million ounces in output by June 30. This includes ounces from mines it has closed since January.
The mid-point of full-year production guidance was 3.38 million oz which compares to the mid-point of interim production guidance of some 1.69 million oz.
AngloGold said today this was owing to improvements from Sunrise Dam, Kibali, Iduapriem, Mponeng (its only remaining underground South African asset) and Tropicana. South African production comprised 13% of AngloGold’s output in terms of retained operations. The sold mines were Moab Khotsong and Kopanang. Tau Tona was closed last year.
Shares in the company lost just under 2% in early trade on the Johannesburg Stock Exchange, but had since recovered to post a gain of 1.43% by midday.
The impact of expected headline and basic earnings for the interim was positive, taking the company into the black after a year of losses in 2017.
AngloGold said it expected to report headline earnings of between $91m and $108m for the six month period, and headline share earnings of between 22 and 26 cents/share. This compares to a headline loss and loss per share at the half year point in 2017 of $89m and 22c/share respectively.
Basic earnings for the period are expected to increase to a profit of between $16m and $51m whilst basic earnings per share would come in between four cents and 12c/share.
The profit included the $67m derecognition charge related to the Mine Waste Solutions Uranium plant in South Africa that was unlikely to be utilised as it shrank its South African footprint. AngloGold said on May 23 it was looking to cut 2,000 jobs from the ranks of its support and services following a restructuring of its South African operations.
Post-tax impairments on certain South African assets of $86m, equal to 21c/share, were accounted for in the comparative period. Both the asset derecognition and the impairments were non-cash items and had been excluded from headline earnings, it said. The basic loss and basic loss per share for the comparative period were $176m and 43c respectively.
The improved overall performance was put down to a 4% increase in production from among retained operations year-on-year, and lower all-in sustaining costs. Capital and exploration expenditure was also reined in during the period.
Perhaps most importantly of all, there was a 6% improvement in the average gold price received for the group whilst lower retrenchment costs were also booked year-on-year.
During 2017, AngloGold also agreed to an estimated once-off, non-cash settlement costs for silicosis class action claims, totalling $46m, equal to 11 cents per share.
