AngloGold output rises for 2nd year in a row - CNBC Africa

AngloGold output rises for 2nd year in a row

Earnings

by Trust Matsilele 0

AngloGold Ashanti posted its second consecutive growth in annual production alongside a 13 per cent improvement in all-in sustaining costs.

The group continued to focus on portfolio improvements and capital discipline.

The company reported a production rise of eight per cent to 4.44Moz at an all-in sustaining cost of $1,026/oz in the 12 months through 31 December 2014, from 4.10Moz at $1,174/oz the previous year.

(READ MORE: AngloGold Ashanti posts strongest Q1 performance in four years)

“The second year of growth is gratifying but the real focus for us is on improving margins,” said chief executive officer Srinivasan Venkatakrishnan.

“Regardless of the gold price, we won't relax the pressure on costs or hesitate to take out marginal production if needed.”

[DATA ANG:AngloGold Ashanti Limited] has over the past 24 months taken decisive action to cut overhead expenditure by two-thirds while improving the quality of its portfolio by bringing into production two new low-cost mines, selling some assets, closing others and removing loss-making ounces from ongoing operations.

The company also saw all-in sustaining costs for 2014 at 18 per cent lower than they were in 2012, while production is up 12 per cent over the same period as Kibali and Tropicana have ramped up output.

“Despite a 10 per cent drop in the average gold price, the company's adjusted earnings before interest, tax, depreciation and amortisation remained steady at 1.67 billion US dollars, while free cash flow improved to 142 million US dollars compared with an outflow of 1.06 billion US dollars the previous year.

The group said in a statement, the improved operational performance was achieved along with a record safety performance.

The group saw the fewest number of workplace fatalities in the company's history and the successful evacuation of its Vaal River mines, with only minor injuries reported, after a magnitude 5.3 earthquake in August 2014.

(READ MORE: AngloGold Ashanti revenue down despite 17% production increase)

AngloGold Ashanti said it was pursuing a range of measures to generate cash from internal sources to reduce debt by about one billion US dollars over the medium term.

“These steps include pursuing additional savings from current operations, realising synergies from combining neighbouring mines and infrastructure in South Africa and potentially introducing partners in key areas, most notably projects in Colombia and in one of its operating assets,” added the group.

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