AGA says Africa delivered 6% increase in gold production

AngloGold Ashanti says the Continental Africa region (excluding South Africa assets) delivered a 6% increase in performance year-on-year, with gold production of 411,000oz (inclusive of 47,000oz of capitalised pre-production at Obuasi) at a total cash cost per ounce of $717/oz for the third quarter ended 30 September 2020, compared to 387,000oz at a total cash cost per ounce of $740/oz for the third quarter ended 30 September 2019.

The region’s total cash cost was little changed at $903/oz for the third quarter ended 30 September 2020, compared to $900/oz for the third quarter ended 30 September 2019.

In Ghana, gold production at Iduapriem was 69,000oz at a total cash cost per ounce of $646/oz for the third quarter ended 30 September 2020, compared to 73,000oz at a total cash cost per ounce of $854/oz for the same period last year.

Production decreased by 5% year-on-year due to reduced plant availability related to a longer-than-planned downtime. This was partially offset by 7% higher recovered grade, as a result of higher feed grade to the plant in line with optimised grade control practices.

Costs were favourably impacted by the higher grades, efficiency gains and lower mining costs as well as favourable moves in stockpiles. These cost tailwinds were partially offset by the rise in royalties linked to the higher gold price.

A decision was taken to invest in and accelerate cut 2 waste stripping at the Block 7 and 8 pit, which will extend into 2021. A portion of the high planned waste stripping in 2021 was brought forward to the fourth quarter in 2020.

This will assist in reaching the ore zone earlier which in turn would lead to a de-risked sequential mine plan in 2021. Further improvements in the crushing circuit via the addition of a tertiary crusher has also been prioritised for the fourth quarter.

In Tanzania, Geita produced 152,000oz at a total cash cost per ounce of $628/oz for the third quarter ended 30 September 2020, compared to 153,000oz at a total cash cost per ounce of $644/oz for the same period last year.

Production was impacted by a 7% reduction in tonnes treated, related to the installation of ball mill brackets and the annual mill inspection. This was largely offset by a 7% increase in recovered grade, mainly due to the higher-grade ore sourced from the Nyankanga open pit. Mining at the pit bottom, which is nearing depletion, continued and offset lower grades from underground operations.

Costs were supported by the higher recovered grade and favourable stockpile movements, which were partially offset by higher royalties, higher costs related to underground mining and an increase in freight and clearing charges following the implementation by the Government of Tanzania, of a new clearing process for goods entering the country.

In the DRC, Kibali produced 91,000oz at a total cash cost per ounce of $651/oz for the third quarter ended 30 September 2020, compared to 91,000oz at a total cash cost per ounce of $586/oz for the same period last year.

Production was flat year-on-year as higher throughput offset the marginally lower recovered grades. Costs were negatively impacted year-on-year due to higher royalties, higher operational costs and unfavourable movements in stockpiles.

In Guinea, Siguiri produced 52,000oz at a total cash cost per ounce of $1,197/oz for the third quarter ended 30 September 2020, compared to 51,000oz at a total cash cost per ounce of $1,075/oz for the same period last year.

Production improved marginally year-on-year due to 5% higher recovered grade, which largely offset lower throughput. Throughput was lower due to power outages, as well as chute blockages and a low feed rate to the mill. Total cash costs were 11% higher year-on-year due to an increase in processing costs as a result of the increase in reagent consumption required for the high levels of carbon in the current period. Increases in the price of lime, cyanide and activated carbon, as well as higher royalties paid, also negatively impacted costs.

On a quarter-on-quarter basis, Siguiri’s production improved by 4%, which also resulted in a commensurate improvement in total cash costs per ounce.

DISCONTINUED OPERATIONS

The South African region produced 96,000oz at a total cash cost per ounce of $1,140/oz for the third quarter ended 30 September 2020, compared to 113,000oz at a total cash cost per ounce of $973/oz for the third quarter ended 30 September 2019. The region’s AISC was $1,324/oz for the third quarter ended 30 September 2020, compared to $1,132/oz for the third quarter ended 30 September 2019.

Mponeng produced 58,000oz at a total cash cost per ounce of $1,094/oz for the third quarter ended 30 September 2020, compared to 65,000oz at a total cash cost per ounce of $967/oz for the same period last year.

Production was 11% lower year-on-year mainly due to poor ground conditions and safety stoppages combined with the revision of the production schedule post the COVID-19 lockdown. Production was further impacted due to the lower overall recovered grade as a result of higher marginal ore dump tonnes treated to offset underground volume losses.

Costs increased year-on-year due to lower production, increases in labour costs and the price of consumables, higher royalty costs, and unfavourable gold-in-process movements. These cost headwinds were partially offset by higher surface volumes treated and favourable foreign exchange movements.

Surface Operations, including Mine Waste Solutions, produced 38,000oz at a total cash cost per ounce of $1,213/oz for the third quarter ended 30 September 2020, compared to 48,000oz at a total cash cost per ounce of $982/oz for the same period last year.

Production was 21% lower year-on-year due to the processing of lower grade tailings at the West Wits surface sources and low ore receiving availability at Vaal River surface sources. This in turn had a negative impact on the overall recovered grade, which declined by 31% year-on-year.

SALE OF SOUTH AFRICA ASSETS

AngloGold Ashanti reached an agreement and concluded the sale of its remaining South African producing assets to Harmony Gold Mining Company Limited (Harmony Gold). These assets include the Mponeng mine as well as the Surface Operations, including Mine Waste Solutions.

The sale was part of the process of streamlining the AngloGold Ashanti portfolio. The sale transaction was completed on 30 September 2020 resulting in Harmony Gold taking full ownership of the assets and associated liabilities from 1 October 2020 and making the initial cash payment of $200m.