Wrap Text
ANG - Anglogold Ashanti - Results for the Fourth Quarter and Year Ended 31
December 2008
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")
RESULTS FOR THE FOURTH QUARTER AND YEAR ENDED 31 DECEMBER 2008
Results for the quarter.
- Gold production at 1.268Moz up on the prior quarter`s performance and ahead
of previous market guidance.
- Obuasi (Ghana) delivers second consecutive quarter of production
improvement, up 7% on the previous quarter as turnaround strategy starts to
take effect.
- Total cash costs at $422/oz for the group, 13% better than previous quarter
and 8% below market guidance with South African operations total cash costs
at $318/oz, down 23%, while Brazilian operations cash costs were $100/oz
lower at $255/oz.
- Adjusted headline loss was $17m, distorted by annual accounting adjustments
which totalled $48m relating to inventory write-downs, current and deferred
tax provisions.
- $1.0bn term facility secured to re-finance convertible bond.
- Transaction announced to sell interest in Boddington for an aggregate
maximum consideration of up to approximately $1.1bn in January 2009.
. and the year
- Fatalities reduce by 57%, and a 20% improvement achieved on all accidents.
- Gold production 4.982Moz - in line with market guidance.
- Total cash costs increased by $87/oz to $444/oz, due to lower production
and inflationary pressure, offset partially by weaker local currencies in
the latter part of the year.
- Hedge commitments reduced by 5.29Moz or 47% to 5.99Moz - company now well
positioned to participate materially in spot prices going forward.
- Hedge buy-backs result in adjusted headline loss of $897m, against adjusted
headline earnings of $278m in 2007.
- Mineral Resources after depletion increase by 16% or 33.4Moz to 241.0Moz,
while Ore Reserves after depletion increase by 2% to 74.9Moz. Following the
sale of Boddington Mine (Australia), Ore Reserves and Mineral Resources
will be at 68.2Moz and 229.1Moz respectively.
- Final dividend declared at 50 South African cents or 5 US cents per share,
resulting in a total dividend of 100 South African cents or 11 US cents per
share for the year.
Detail
For the fourth quarter, gold production was 1.4% up on previous guidance at
1.268Moz, with total cash costs 8% better at $422/oz, making this the fourth
consecutive quarter that the company has delivered on or above its production
and total cash cost guidance.
Production ounces improved across most operations in line with, or ahead of,
plan:
- Obuasi in Ghana achieved a second consecutive quarter of production
improvement, up 7% on the previous quarter as the company executes its
turnaround strategy;
- CC&V in the USA posted a 24% quarter-on-quarter improvement in
production;
- Uranium production increased 2% to 353,000 pounds;
- Production at Geita in Tanzania was lower than anticipated, due to un-
planned plant maintenance.
Total cash costs for the group in the fourth quarter were 8% lower than guidance
at $422/oz, assisted by the higher production, but primarily due to currency
exposure with approximately 66% of the company`s costs in non-US dollar based
environments. The currency leverage resulted in the South African operations
averaging $318/oz for the quarter, down 23%, while the Brazilian operations
achieved a $100/oz (28%) improvement, reducing to $255/oz.
For the year, gold production of 4.98Moz was at the upper end of market guidance
provided at the beginning of the year, with cash costs of $444/oz also within
market guidance.
The company continued to execute its hedge reduction strategy, with hedge
commitments reducing from 6.30Moz at the end of September 2008 to 5.99Moz at
year-end. The received price was 13.6% lower than the spot price at $687/oz due
to ongoing hedge book restructuring, an improvement of 6.7% on the previous
quarter and within market guidance.
At 31 December 2008 the net delta hedge position was 5.22Moz, representing a
further reduction of 0.57Moz for the quarter. The company is now positioned in
line with expectations to receive a discount of approximately 6% on spot during
2009, assuming a spot price of $900/oz.
The company recorded an adjusted headline loss of $17m, after annual accounting
adjustments totalling $48m which included write-downs of Geita stockpiles
($19m), stores ($21m) and current and deferred tax provisions ($8m).
During the quarter, the company recorded exceptional asset impairment charges of
$1.25bn (net of tax) in relation to the former Ashanti assets (comprising
Obuasi, Geita and Iduapriem) and certain other investments and sundry assets.
This adjustment, which is of a non-cash nature, is based on assumptions relating
to market conditions which include the lower gold forward curve, higher discount
rates, increased operating costs resulting from higher power tariffs in Ghana
and reduced reserves at Geita. The asset impairment charges are excluded from
adjusted headline earnings.
The company also announced that net of depletion, reserves increased by 1.8Moz
to 74.9Moz during 2008. Mineral Resources increased by 33.4Moz to 241.0Moz, with
the single largest contribution coming from the company`s La Colosa project in
Colombia, where 12.3Moz were delineated following the latest stage of the
development programme. Following the completion of the announced sale of
Boddington Mine in Australia, reserves will stand at 68.2Moz and Mineral
Resources at 229.1Moz.
A dividend of 50 South African cents (or 5 US cents) per share was declared for
the six months ended 31 December 2008, resulting in a total dividend of 100
South African cents per share (or 11 US cents per share) for the year.
2009 Outlook
In respect of the 2009 outlook, the company is expecting to produce between
4.9Moz and 5.0Moz of gold at total cash costs ranging from $435/oz to $450/oz,
based on currency assumptions to the US dollar of R9.75/$, A$/$0.675, BRL 2.25/$
and Argentinean peso 3.65/$.
Commenting on the results, CEO Mark Cutifani said: "I am pleased that we have
delivered consistently on our strategic and business commitments through 2008,
and whilst our constant focus on safety has resulted in a significant
improvement in safety performance across all operations, there still remains
much left to be done. 2008 has been a year of restructuring the business and
positioning it for future value creation, as we implemented turnaround plans at
key assets, reduced the hedge book by some 5.29Moz or 47% of committed ounces
and significantly strengthened our capital structure through the re-financing of
our convertible bond with both a new US$1 billion loan facility and, following
the end of the quarter, the sale of our interest in Boddington.
After this transformational year we now have much improved gold price leverage
and balance sheet flexibility together with an operational framework and
management team that all combine to create a strong platform as we go into
2009."
ENDS
9 February 2009
JSE SPONSOR : UBS
Queries
South Africa
Himesh Persotam (Investor Relations) Tel: +27(0)11637-6647
Mobile: +27(0)82 339 3890 E-mail:hpersotam@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, including its
intentions and ability to refinance its $1 billion convertible bond, 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 2007,
which was distributed to shareholders on 31 March 2008, and report to
shareholders for the quarter and nine months ended 30 September 2008, which was
distributed to shareholders on 30 October 2008. 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.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: 09/02/2009 08:32:04 Supplied by www.sharenet.co.za
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