[miningmx.com] — ANGLOGOLD Ashanti’s quarterly figures received a shot in the arm from the rallying gold price and an increase in production, posting adjusted headline earnings of R2.1bn for the three months to end-September – up 122% from R980m in June.
The adjusted figure excluded about R11bn associated with the closure of the group’s hedge book. Another R8bn in costs would be accounted for in the fourth quarter.
Production was 1.162 million ounces (Moz) at a total cash cost of $643/oz for the period under review, compared with the previous quarter’s output of 1.13Moz at $617/oz, and guidance of 1.15Moz at $645/oz.
“Our operations are performing well and there’s a strong tailwind from the gold price,’ CEO Mark Cutifani said. “With the hedge book out of the way we can now capture the full gold price, which has the potential to further boost margins and increase cash flow.’
Cutifani said the group is budgeting for a gold price of between $1,300/oz and $1,400/oz for the next 12 months.
AngloGold’s South African operations showed a 7% increase in production to 478,000oz, while total cash costs rose 6% to $594/oz. Sunrise Dam in Australia posted a 7% growth in production to 93,000oz and the Geita mine in Tanzania increased output by 3% to 93,000oz, while reducing costs by 15% to $705/oz.
The group anticipates fourth-quarter production of 1.14Moz, in line with its full-year production forecast of 4.5Moz.
Its cash costs forecast is $640/oz, assuming an exchange rate of R7.25 to the dollar and $675/oz assuming an exchange rate of R6.75.
AngoGold this week also approved the development of the 3.3Moz Tropicana gold project in Australia, a joint venture with Independence Group which owns a 30% stake.
The project is expected to pour its first gold in 2013. It will require capital expenditure of $710m to $760m with annual output of 470,000oz to 490,000oz in the first three years, Cutifani said.
“Tropicana is the first of AngloGold Ashanti’s major gold discoveries to move into production,’ Cutifani said. “It’s gratifying to be developing our own projects at a time when so many majors are forced to pay huge premiums to fill their project pipelines.’
The group’s shares traded up 1.89% at R356.50 in Thursday early morning trade.
