AngloGold Ashanti on Friday reaffirmed its annual guidance as it reported an improved second-quarter performance compared to the first three months of the year, underpinned by a 12% increase in production.
In its interim results for the six months that ended June 30, 2023, the group said gold production rose to 652 000 ounces in the second quarter of 2023 versus 584 000 ounces in the previous three-month period.
“The stronger second quarter was supported by production and cost improvements across most assets primarily driven by both higher tonnes processed and recovered grades,” it said.
Total cash costs improved 2% quarter-on-quarter, and all-in-sustaining costs (AISC) improved 4% quarter-on-quarter.
Basic earnings were $40 million (R714m), or 10 US cents per share, in the first half of 2023, compared to basic earnings of $298m, or 71 US cents per share, in the same period a year earlier.
The group declared an interim dividend of 70 South African cents per share, equivalent to 4 US cents per share, compared to last year's 29 US cents.
AngloGold Ashanti said it was taking steps to narrow a value gap with international peers by improving relative costs and the life of its key mines, all while enhancing safety, cash conversion, and the delivery of projects.
“In the past year, the company added an additional 5 million ounces (Moz) of Mineral Resources in Nevada, proposed a joint venture with Gold Fields in Ghana to create Africa’s largest gold mine, and proposed a change in the primary listing for its shares to the New York Stock Exchange (NYSE), the largest global market for investment in gold equities,” the group said.
AngloGold Ashanti CEO Alberto Calderon said: “We’re seeing momentum continue to build at our key assets after a steady start to the year and a much improved second quarter. We’re expecting strong operating improvements in the second half.”
According to the group, following a challenging first quarter of 2023, second-quarter production increased versus the first quarter at Kibali in the Democratic Republic of Congo by 38%, Geita mine in Tanzania by 21%, AGA Mineração by 63%, Serra Grande by 47%, both in Brazil, Sunrise Dam by 8% and Tropicana by 16%, both in Australia.
“Second quarter production would have been higher were it not for the carbon-in-leach (CIL) tank failure at Siguiri in Guinea, which has since been repaired. Second quarter total cash costs per ounce were 2% lower than in the first quarter of 2023.
“Second-quarter total cash costs per ounce rose 8% year-on-year compared with the 16% year-on-year increase in first-quarter total cash costs per ounce," it said.
The group said the first half production was marginally higher versus the first half of 2022, with a strong production gain from Obuasi supported by steady contributions from Sunrise Dam Geita, Iduapriem, and Tropicana. Recovered grades continued their upward trend, increasing 4% year-on-year mainly due to ongoing reinvestment in the portfolio.
“The Obuasi gold mine in Ghana continued its ramp-up with a 29% jump in production year-on-year alongside a drop in unit costs as grades and tonnages improved.
“Obuasi is expected to deliver a stronger second half performance as more material is moved to surface following successful de-bottlenecking of existing infrastructure,” it said.
In Brazil, the Cuiabá mine continued to produce gold from its gravity circuit and gold concentrate in line with its plan. Despite second-quarter improvements in production versus the first quarter of 2023, the Brazil portfolio continued to make losses, the group said.
Looking ahead, the group said it expected to see production growth of approximately 4% in 2024 relative to the 2023 production guidance at the midpoint.
“The primary driver of expected production growth is related to Obuasi stepping up following the completion of Phase 3 of the Obuasi redevelopment project, Iduapriem production increasing following the completion of its reinvestment and modest production increases at Kibali, Siguiri, Geita, Sunrise Dam and Tropicana,” it said.
AngloGold Ashanti’s share price ended Friday 1.57% lower at R352.79 on the JSE.
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