| Fri 31 Jul 2009, 8:38 | | ANG - Anglogold Ashanti Limited - Posts Record 2nd-Quarter Earnings on Higher |
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ANG
ANANO
ANG - Anglogold Ashanti Limited - Posts Record 2nd-Quarter Earnings on Higher
Production, Gold Price
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number: ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
ANGLOGOLD ASHANTI POSTS RECORD 2ND-QUARTER EARNINGS ON HIGHER PRODUCTION, GOLD
PRICE
AngloGold Ashanti Limited reported an 11% increase in second quarter adjusted
headline earnings to a record, after improved performance from its Tanzanian and
Ghanaian regions helped boost production.
Adjusted headline earnings increased to $167m, or US47 cents a share in the
three months to 30 June, compared with $150m, or US42 cents, in the previous
quarter.
"We saw a strong operating performance across most of the operations and a nice
sweetener from our received gold price," Chief Executive Officer Mark Cutifani
said. "We`re seeing the results of our interventions in the continued
improvements at Obuasi and the early signs of a recovery at Geita are also very
encouraging for us."
AngloGold Ashanti`s production during the period rose to 1.127Moz at a total
cash cost of $472/oz, from 1.103Moz at $445/oz in the prior quarter. Higher
production and lower costs were realised in South America and in Africa, outside
of South Africa.
The company has appointed new management this year to oversee its operations in
Ghana and Tanzania, part of its strategy to ensure appropriate skills at each
level in the organization. Obuasi reported a 10% rise in production to 101,000
ounces and a 16% drop in cash costs to $589/oz, while Geita posted a 43%
increase in production to 63,000 ounces and a 14% decline in costs.
The company`s West Wits operations in South Africa raised production by 7%,
despite the large number of public holidays around Easter and the general
election. The Vaal River operations, however, reported a 15% decline in output
and a commensurate increase in costs, largely due to safety-related stoppages.
Eight of our colleagues tragically lost their lives across the company`s
operations during the quarter. This safety performance is a matter for concern
and AngloGold Ashanti`s management has intensified its efforts to improve
overall safety across its operations. Interventions have been made with teams
that have had the highest accident rates to effect rapid improvements. A broader
strategy to better the organisation`s safety performance will be implemented in
the first quarter of 2010. It is important to note that AngloGold Ashanti`s lost
time injury frequency rate, a broad measure of overall safety performance,
declined 19% during the quarter to its lowest level ever. There have been no
fatalities since June 2.
The safety stoppages, combined with mill repairs in the first quarter at Geita
and lower-than-anticipated recoveries from the Cripple Creek & Victor in the
U.S., have necessitated the adjustment of full-year guidance to 4.7Moz - 4.8Moz
from the original target of 4.9Moz - 5.0Moz. For the third quarter, production
is estimated at 1.2 million ounces at a total cash cost of approximately US$530
per ounce, assuming an average rand exchange rate of R8.10 to the US dollar for
the quarter.
The average price received during the quarter increased by 5% to $897/oz,
achieving a 3% discount to the spot price.
Following the successful issue of a five-year convertible bond and receipt of
the first tranche of the proceeds from the sale of its Boddington stake, the
company used $797m of its internal cash reserves to restructure its hedge book
during July.
"We`ve worked hard to strengthen our balance sheet and that gave us the
flexibility to skin the hedge book by getting it well below one year`s
production," Cutifani said. "The market fundamentals are extremely robust for
gold, which supported our decision move aggressively sooner rather than later."
The restructuring affected about 1.4 million ounces, reducing the overall hedge
commitment at 25 July to 4.47 million ounces, less than one year`s production.
The committed ounces are expected to decline further, to 4.1 million ounces by
the end of 2009, a year ahead of target.
The company now expects to achieve a 7% discount to spot gold prices at $950/oz
gold price, with the hedge book reducing by approximately 800,000oz a year,
until it winds up at the end of 2014.
ENDS
JOHANNESBURG
31 JULY 2009
JSE Sponsor - UB
Contacts
Alan Fine (Media) Tel: +27 (0) 11 637 6383 Mobile: +27 (0) 83 250 0757
E-mail: afine@anglogoldashanti.com
Joanne Jones (Media) Tel: +27 (0) 11 637- 6813 Mobile: +27 (0) 82 896 0306
E-mail: jjones@AngloGoldAshanti.com
Sicelo Ntuli (Investor) Tel: +27 (0) 11 637 6339 Mobile: +27 (0) 71 608 991
E-mail: sntuli@AngloGoldAshanti.com
Stewart Bailey (Investor) Tel: +1 212 836 4303 Mobile: +1 646 338 4337
E-mail: sbailey@AngloGoldAshanti.com
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effects of the reduction, the economic outlook
for the gold mining industry, expectations regarding gold prices, production,
cash costs and other operating results, growth prospects and outlook of
AngloGold Ashanti`s operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of AngloGold
Ashanti`s exploration and production projects and completion of acquisitions and
dispositions, AngloGold Ashanti`s liquidity and capital resources, and
expenditure and the outcome and consequences of any pending litigation
proceedings, contain certain forward-looking statements regarding AngloGold
Ashanti`s operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. For a discussion of such factors,
refer to AngloGold Ashanti`s annual report for the year ended 31 December 2008,
which was distributed to shareholders on 27 March 2009 and the company`s annual
report on Form 20-F, filed with the Securities and Exchange Commission in the
United States on May 5, 2009 as amended on May 6, 2009. AngloGold Ashanti
undertakes no obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after today`s date
or to reflect the occurrence of unanticipated events. All subsequent written or
oral forward-looking statements attributable to AngloGold Ashanti or any person
acting on its behalf are qualified by the cautionary statements herein.
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglgoldashanti.com and under the "Investors" tab on
the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
Date: 31/07/2009 08:38:01 Produced by the JSE SENS Department.
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