| Thu 4 Aug 2011, 7:57 | | ANG - AngloGold Ashanti Limited - Anglogold Ashanti earnings surge to record |
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ANG
ANANO
ANG - AngloGold Ashanti Limited - Anglogold Ashanti earnings surge to record
$342m; ups dividend
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 EARNINGS SURGE TO RECORD $342M; UPS DIVIDEND
(ANGLOGOLD ASHANTI) - AngloGold Ashanti posted record adjusted headline
earnings* of $342m in the second quarter after production and costs improved
amid record gold prices.
"We did a good job of containing costs and growing production, despite some
difficult production issues," Chief Executive Officer Mark Cutifani said. "Our
focus on driving free cash-flow generation and returns is evident in these
results and this positions us well as we grow through a prudent, well-managed
capital programme."
AngloGold Ashanti eliminated the gold industry`s last remaining major hedge
book in October, last year, improving cash flow and earnings by increasing
exposure to the rising gold price. The company is also in the process of
implementing a new operating model to improve productivity across its 20
existing operations and a portfolio of development projects as it expands
production by around 1Moz, to 5.5Moz in 2014/2015.
Adjusted headline earnings in the three months to June 30 were $342m, or 89
US cents a share, compared with $203m, or 53 US cents a share the previous
quarter. The Continental Africa operations were a significant contributor, with
the Geita and Obuasi mines both delivering cost and production improvements. The
South African operations increased production by 7% and contained cost increases
to 8%, despite inflationary pressures including annual power-tariff increases
and a stronger local currency.
Cash flow generated from the company`s operating activities during the first
quarter rose 24% to a record $636m. Net debt** improved by another 22% to $866m,
underscoring the improvement in AngloGold Ashanti`s cash generation, even after
the company funded its capital expenditure requirements. The improved cash flow
allowed for a 38% increase in the interim dividend to 90 South African cents a
share. In dollar terms, the 13 US cents a share dividend represents a 44%
improvement compared with last year`s interim payout.
Production was 1.086Moz at a total cash cost of $705/oz in the three months
to 30 June, compared with 1.039Moz at $706/oz the previous quarter, and guidance
of 1.09Moz at $760/oz.
Additional exploration at the Vogue discovery, beneath the Sunrise Dam
operation in Australia, returned high grade intersections reflecting improved
potential to increase the size of the deposit, as did drilling at the Cerro
Vanguardia mine in Argentina.
Tragically, three fatalities were recorded after an underground mining
incident in South Africa and separate accidents in Brazil and at an exploration
camp in North Africa. The company`s long-term safety performance remains
markedly better than three years ago, when the new safety strategy was launched.
This is reflected in an improvement of around 80% in its fatality injury
frequency rate over the period. Efforts continue to push toward an elimination
of workplace injuries.
Guidance of the year has been updated to around 4.45Moz at a total cash cost
of $725/oz to $740/oz1. This production level reflects the impact of floods at
the Sunrise Dam mine in Australia, a decision to halt mining of the VCR pillar
at TauTona following a seismic event earlier in the year, a drought at the
Cripple Creek & Victor mine in the U.S. which impacted output from the heap-
leach pad, and a six-day strike which halted production from the South African
operations. Total cash costs are impacted by the lower output, stronger local
currencies and a higher fuel price. Previous guidance was for 4.55Moz to
4.75Moz, at a total cash cost of $660/oz to $685/oz.
Guidance for the second quarter is around 1.11Moz at $775/oz, assuming an
exchange rate of R6.75 to the dollar and Brent crude price of $115 a barrel.
* Excludes cost of accelerated hedge buy-back
** Excludes mandatory convertible bonds 1assuming an exchange rate of
R6.83/$ and an oil price of $114/barrel.
ENDS
4 AUGUST 2011
JSE Sponsor - UBS
Contacts
Tel: E-mail:
Alan Fine (Media) +27 11 637 6383 afine@AngloGoldAshanti.com
Mike Bedford (Investor) +27 11 637 6273 mbedford@anglogoldashanti.com
Stewart Bailey(Investor) +1 2128364303 sbailey@anglogoldashanti.com
Certain statements made in this communication, including, without limitation,
those concerning 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 the completion of announced mergers and acquisitions transactions, AngloGold
Ashanti`s liquidity, capital resources and capital expenditure and the outcome
and consequences of any litigation or regulatory proceedings or environmental
issues, 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 including environmental approvals and actions, fluctuations
in gold prices and exchange rates, and business and operational risk management.
For a discussion of certain of these and other factors, refer to AngloGold
Ashanti`s annual report for the year ended 31 December 2010, which was
distributed to shareholders on 29 March 2011 and the company`s 2010 annual
report on Form 20-F, which was filed with the Securities and Exchange Commission
in the United States on May 31, 2011. These factors are not necessarily all of
the important factors that could cause AngloGold Ashanti`s actual results to
differ materially from those expressed in any forward-looking statements. Other
unknown or unpredictable factors could also have material adverse effects on
future results. 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.
This communication may contain certain "Non-GAAP" financial measures.
AngloGold Ashanti utilises certain Non-GAAP performance measures and ratios in
managing its business. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the reported operating results or cash flow
from operations or any other measures of performance prepared in accordance with
IFRS. In addition, the presentation of these measures may not be comparable to
similarly titled measures other companies may use.
AngloGold Ashanti posts information that is important to investors on the
main page of its website at www.anglogoldashanti.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: 04/08/2011 07:57:00 Produced by the JSE SENS Department.
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