AngloGold Ashanti reports jump in earnings

JOHANNESBURG - AngloGold Ashanti reported a jump in earnings on both higher production and the gold price when it released its second quarter earnings on Friday.

The world’s third largest gold miner said second quarter adjusted headline earnings increased to US167 million in the three months to June 30, compared with US150m in the previous quarter.

“We saw a strong operating performance across most of the operations and a nice sweetener from our received gold price,” CEO Mark Cutifani said.

“We’re seeing the results of our interventions in the continued improvements at Obuasi ŠGhanaÆ and the early signs of a recovery at Geita ŠTanzaniaÆ are also very encouraging for us,” he said.

The miner’s production during the period increased to 1.127 million ounces at a total cash cost of US472 per ounce, from 1.103 million ounces at US445 per ounce in the prior quarter.

“Higher production and lower costs were realised in South America and in Africa, outside of South Africa,” the company said.

The company has appointed new management to oversee its operations in Ghana and Tanzania, part of its strategy to ensure appropriate skills at each level in the organisation.

AngloGold Ashanti said Obuasi had reported a 10 percent rise in production to 101,000 ounces and a 16 percent drop in cash costs to US589 per ounce, while Geita posted a 43 percent increase in production to 63,000 ounces and a 14 percent decline in costs.

The company’s West Wits operations in South Africa raised production by seven percent, “despite the large number of public holidays around Easter and the general election”, the company said.

The Vaal River operations, however, reported a 15 percent decline in output and a commensurate increase in costs, largely due to safety-related stoppages, the company added.

“Eight of our colleagues tragically lost their lives across the company’s operations during the quarter.

“This safety performance is a matter for concern and AngloGold Ashanti’s management has intensified its efforts to improve overall safety across its operations,” Cutifani said.

The company was working with teams that had had the highest accident rates to effect rapid improvements, he added.

“A broader strategy to better the organisation’s safety performance will be implemented in the first quarter of 2010.

“It is important to note that AngloGold Ashanti’s lost time injury frequency rate, a broad measure of overall safety performance, declined 19 percent during the quarter to its lowest level ever.”

He said there had been no fatalities since June 2.

For the third quarter, the company estimated production at 1.2 million ounces at a total cash cost of around US530 per ounce, “assuming an average rand exchange rate of R8.10”.

-Sapa