AngloGold Ashanti records Q3 profit

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The company said on Wednesday that the jump in earnings was as a result of great efficiency and improved initiatives.

Gold production for the three months to September 30 rose to 1.043Moz at a total cash cost of 809 dollars an ounce, compared with guidance of 950,000oz to 1Moz at 860 dollars an ounce to 890 dollars an ounce.

Normalised adjusted headline earnings, after stripping out one-time items including retrenchment costs and the gain on settlement of a mandatory convertible bond, was 110 million dollars compared with nine million dollars for the second quarter.  

AngloGold Ashanti responded swiftly to a sharp drop in the gold price this year, cutting unprofitable ounces from its production base, optimising its capital expenditure and enhancing efficiency by slashing waste and improving its mine plans.

The company’s executive has led a drive since the appointment of the new CEO in May, to realise targeted cuts of 460 million dollars from corporate and exploration costs, 500 million dollars from direct operating cost savings and also to reduce capital expenditure after two new projects poured their first gold in September.

“We’ve delivered a decisive response to the lower gold price with all operating regions showing better production and we’ve seen cost improvements at every level,” chief executive officer, Srinivasan Venkatakrishnan said in a statement.

The Tropicana mine in Australia and the Kibali mine in the Democratic Republic of Congo both produced their first gold in the last week of September, ahead of schedule and within budget.

Together, these two mines are expected to contribute production of between 550,000oz to 600,000oz next year at total cash costs below the company’s current average.

While these are expected to further improve AngloGold Ashanti’s overall cost profile, the company will look to continue removing unprofitable ounces from its production base in order to further improve free cash flow generation.

AngloGold Ashanti also reported a record safety performance with an all-injury frequency rate of 6.65 per million hours worked. There were no fatalities reported at the deep South African underground gold mines during the quarter, and the Vaal River Operations maintained their record safety performance, with more than 14 months since its last fatal accident.

Adjusted headline earnings for the third quarter were 576 million dollars, compared with a loss of 135 million dollars the previous quarter.