AngloGold Ashanti Reports $924m Earnings

AngloGold Ashanti

VENTURES AFRICA – AngloGold Ashanti, which has gold mining operations in Mali, Ghana and Namibia Africa among other countries in Africa and across the world, said 2012 adjusted headline earnings had declined to $924 million despite a tough period characterised by a major work stoppage in South Africa.

The company also operates in Namibia, Argentina and the United States and is looking up to full-scale gold mining operations from Australia and Colombia. AngloGold said on Wednesday that it expected to deliver higher margin production from its South African mines.

The South African mines have been affected by “a strike between the end of September and the beginning of November” last year. AngloGold Ashanti said it had taken a decision to terminate its underground development contract with Mining and Building Contractors Limited at its Obuasi mine in Ghana in a bid to “improve production and costs”.

The Geita mine in Tanzania was the group’s largest production contributor, improving annual production by 7 percent to 531,000 ounces at lower cash production costs of $660 per ounce.

“Exploration spending across the group has been rationalised, corporate and operating costs are undergoing a review, some assets deemed to be non-core are being considered for sale and capital expenditure has been prioritised,” the company announced.

Tony O’Neill, the joint interim chief executive officer of the gold miner said AngloGold Ashanti had “moved decisively to ensure” that the company “continue a strong recovery from a difficult” period to the end of last year.

Adjusted headline earnings for the year amounted to $924 million, which translates to about 239 cents per share. However, about $208 million was lost to the strike, a development that has reduced earnings from the previous contrasting period’s earnings of $1.3 billion.

Gold production in the period to end-December was 3.94 million ounces and was produced at a cost of $862 per ounce. This contrasts to the 4.33 million ounces produced in 2011 at a cost of $728 per ounce.

Production in the current year is anticipated to grow to between 4.1 million ounces and 4.4 million ounces while costs are expected to be between $815 and $845 per ounce.

“Our focus is on improving margins and delivering returns, rather than production growth, and that will continue to drive our decision making,” said Srinivasan Venkatakrishnan, the company’s other chief executive officer.

“AngloGold Ashanti continues to deliver the best returns on capital amongst the gold majors, which reflects strict discipline in capital deployment over the past five years,” said outgoing chief executive officer, Mark Cutifani.