JOHANNESBURG – The world›s third-largest gold mining company by output, AngloGold Ashanti, said on Friday it had withstood disruptions related to Covid-19 to deliver a solid first half production performance and a surge in free cash flow generation to US$177 million.
It said the bulk of the inflow for the first six months of the year came in the three months to June, after an outflow of $31 million last year. Free cash flow before growth capital, the metric on which dividends are calculated, soared 376% or nearly fivefold to $324 million.
“The business is in excellent shape; cash flows are extremely robust, demonstrating the significant operating leverage we have to this strong gold price,” outgoing CEO Kelvin Dushnisky said.
“While the recent rally in the gold price is welcome, tight cost and capital management will continue to be the key focus areas for us as we work to capture this widening margin and increase reserves.”
Adjusted earnings before interest, taxes, depreciation, and amortisation for the first six months of the year increased by 59% $1.096 billion, helped by a 26% year-on-year increase in the gold price received and weaker local currency impacts.
AngloGold Ashanti is investing in the redevelopment of its Obuasi gold mine in Ghana as well as exploration and ore reserve development to increase its operating flexibility and increase reserves.
On Friday it said interim chief executive Christine Ramon would continue to focus on the inward investment programme, with rigorous capital allocation guidelines including leverage and return targets.
Production in the six months to June dipped to 1.469 million ounces at a total cash cost per ounce of $810, compared to 1.554 million ounces at $792/ounce for the same period last year.
All-in sustaining costs were $1 031 per ounce for the first half of 2020, compared with $1 002 last year.
AngloGold Ashanti said the adverse impact of the Covid-19 pandemic on output in the first half of the year was limited to an estimated 85 000 ounces, of which 63 000 ounces related to the company›s South African operations.
Second-quarter production increased 5% over the first quarter of 2020, rising to 753 000 ounces from 716 000 ounces. Quarter-on-quarter production improvements were recorded at the company›s Sunrise Dam, Serra Grande, Iduapriem, Obuasi, Geita, Siguiri and Cerro Vanguardia operations.
– Nampa/ANA