[miningmx.com] — ANGLOGOLD Ashanti boosted earnings to a record $342m (R2.3bn) in the June quarter on the back of higher gold production, good cost control and a record gold price.
The group produced 33,776kg of gold (March quarter: 32,303kg) and held dollar cash costs flat at $705/oz ($706/oz) while costs actually dipped 3% in rand terms to R153,441/kg (R158,707/kg).
CEO Mark Cutifani said “hopefully, these results will draw everybody’s attention to just how much leverage we have to the gold price on cash flow and earnings.”
AngloGold increased its interim dividend by 38% to 90 South African cents, which translates into a 44% rise to 13 US cents.
While that’s a healthy increase it seems likely to disappoint some analysts who were looking for a better payout, with forecasts ranging as high as 130 SA cents.
Cutifani said: “You are always going to get people looking for a higher dividend but our dividends are rising at a faster rate than the increase in the gold price.
“We have got the best growth project pipeline in the gold industry with a number of new developments coming on stream over the next three years and we need to make sure we can fund that growth pipeline while continuing to pay dividends.
“What we are aiming at is continuity and we do not want to have to make big shifts backwards and forwards on our dividends.”
Cutifani said he was particularly pleased with the performance of the group’s South African mines which produced 431,000oz of gold at a total cash cost of $688/oz, compared with 401,000oz at a cash cost of $637/oz in the March quarter.
That was despite the stronger rand, winter electricity tariffs and higher royalty payments triggered by the rising gold price.
At the end of July, AngloGold bought a 20% stake in struggling gold and uranium producer First Uranium for R205m.
Asked about AngloGold’s intentions regarding First Uranium, Cutifani said “we are focused on value and this was an opportunistic deal through which we bought that stake at 70% below the high for First Uranium stock.
“We are a major producer of uranium and have recently made a number of technical improvements increasing our recovery efficiencies.
“The stake in First Uranium became available and we thought it was worth picking up to look at what potential opportunities could exist. We will make a decision on what happens next from there.”
Cutifani said AngloGold expected to produce around 1.11 million ounces (moz) of gold at a total cash cost of $775/oz in the current September quarter, but he revised production guidance for the full year down to around 4.45moz from the previous range of 4.55moz to 4.75moz.
Reason was the impact on group production during the March quarter from a string of factors, including flooding at Sunrise Dam in Australia, the decision to stop mining the shaft pillar at TauTona for safety reasons, drought at Cripple Creek which affected the leach pad operation as well as lower-than-anticipated grades at Siguiri.
