Wrap Text
ANG - AngloGold Ashanti Posts Strong First Quarter Earnings
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 STRONG FIRST QUARTER EARNINGS
Results for the quarter...
- Continued progress on safety, with lowest-ever number of Lost Time
Injuries, while maintaining an improved fatality rate.
- Production of 1.103Moz, in line with updated guidance.
- Total cash costs of $445/oz, in line with original guidance.
- Gold spot price up 14%; received price up 25% quarter-on-quarter.
- Hedge book commitments reduced by further 154,000oz, with 6% discount to
average spot price received.
- Adjusted headline earnings of $150m, up significantly from prior-quarter
$17m loss.
- Further portfolio optimisation through sale of Boddington mine to Newmont
Mining Corp. and Tau Lekoa mine to Simmer & Jack Mines Limited.
- Anglo American Plc sale of remaining stake to Paulson & Company removes
overhang.
AngloGold Ashanti Ltd. reported adjusted headline earnings of $150 million,
or 42 cents a share, in the three months through March 31, compared with a
loss of $17 million, or 5 cents, the previous quarter.
"The earnings performance shows strong leverage to higher gold prices, even
during what is traditionally a slow production quarter,`` Chief Executive
Officer Mark Cutifani said. "Our strategy of reducing the hedge book by almost
half over the past year is yielding real results, giving a good kicker to our
received gold price.``
The company continued with its strategy of reducing the hedge book,
delivering 154,000oz against commitments during the quarter. This helped
achieve a 5.6% discount to spot gold-prices, improving on the target of a 6%
discount this year.
Hedge commitments stand at 5.84Moz as of March 31, representing an overall
reduction of almost 50% over the past year. While the average spot gold price
rose 14% compared with the previous quarter, AngloGold Ashanti`s received gold-
price jumped by 25%.
"The improved earnings are due to higher spot gold prices, a lower hedge
discount and weaker local operating currencies,`` Chief Financial Officer
Srinivasan Venkatakrishnan said. "We remain committed to reducing the hedge
book further and achieving the narrowest possible discount to spot gold
prices.``
Total cash costs for the group were well contained from the prior quarter,
rising 5% to $445/oz, in line with initial guidance.
Production in the first three months of the year, traditionally the weakest
operational period as it follows the annual 10-day, year-end break at the
South African mines, declined by 13% to 1.103Moz from the previous quarter. As
indicated in revised guidance issued on April 2, output was further affected
by the effective loss of three production days across our entire South African
division for safety interventions and extended maintenance to the mill at the
Geita Gold Mine in Tanzania.
In a move aimed at speeding up the turnaround at the Geita in Tanzania,
Graham Ehm, Executive Vice President for AngloGold Ashanti`s Australian
operations and one of the company`s most experienced open-pit mine operators,
has been seconded to Geita. He will be working in co-operation with Richard
Duffy, the Executive Vice President for AngloGold Ashanti`s African
operations.
Keith Faulkner, the new head of AngloGold Ashanti`s operations in Ghana, is
making good progress at Obuasi, where development metres continue to increase
and cost management is improving.
"The issues that affected our operational performance in the first quarter
have largely been resolved,`` said Duffy. "We are now looking forward to
building on successes at Obuasi and getting Geita back on track.``
Strong achievements made in improving safety were marred by two fatalities
during the quarter at AngloGold Ashanti`s South African mines. Safety remains
the company`s top priority and operational management continued to make good
progress on all fronts during the past year, recording the lowest-ever number
of lost-time injuries and a 58% decline in the fatality injury frequency rate.
Regrettably, the second quarter thus far has been disappointing with four
fatalities.
AngloGold Ashanti also noted the Colombian government`s decision to award
exploration permits covering a portion of the company`s La Colosa concession.
Once formally awarded, the permits will allow the resumption of exploration
and further work on the pre-feasibility study. The company will co-operate
closely with local communities and non-governmental organizations in
developing a sustainable development plan to benefit all stakeholders.
Initial estimates indicate an investment of about $200 million is needed
over the next three to four years to increase knowledge of one of the most
significant gold discoveries of the past decade and the first significant gold
porphyry discovery in the Colombian Andes. An investment of that magnitude
will create roughly 700 direct jobs and about three times that number in
indirect employment opportunities.
"Receiving the permits from government will be a significant step
forward,`` Chief Executive Officer Mark Cutifani said. "The La Colosa
development could ultimately be a game-changer not only for AngloGold Ashanti,
but also for Colombia`s mining industry.``
ENDS
15 May 2009
JSE Sponsor - UB
Contacts
Sicelo Ntuli (Investor) Tel: +27 (0) 11 637 6339 Mobile: +27 (0) 71 608 991
E-mail: sntuli@AngloGoldAshanti.com
Stewart Bailey (Investor) Tel: +1 646 717-3978
E-mail: sbailey@AngloGoldAshanti.com
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
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: 15/05/2009 08:00:03 Supplied by www.sharenet.co.za
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