AngloGold Ashanti cuts debt by 41%, advances reinvestment projects
JOHANNESBURG – AngloGold Ashanti delivered first-half headline earnings of $363m amid a challenging first half of the year, with performance affected by the ongoing COVID-19 pandemic, increased costs, lower realised grades across certain operations and the voluntary suspension of underground mining activities at the Obuasi Mine following a fatal accident on 18 May 2021.
Adjusted net debt declined by 41% year-on-year to $850m at 30 June 2021, from $1.431bn at 30 June 2020. Mining activities at Obuasi will remain suspended pending the conclusion of a third-party review of the mining and ground management plans.
AngloGold Ashanti’s strategy of improving operating flexibility through investment in Ore Reserve development and Ore Reserve expansion at sites with high geological potential remains a key priority and is reflected by the 33% year-on-year increase in total capital expenditure to $461m (including equity accounted joint ventures) in the first half of 2021, compared to $346m from continuing operations in the first half of 2020.
Production for the first six months of 2021 was 1.200Moz at a total cash cost of $1,003/oz, compared to 1.323Moz at $770/ oz from continuing operations for the first six months of 2020. All-in sustaining costs (AISC) were $1,333/oz for the first six months of 2021, compared to $1,002/oz from continuing operations for the corresponding period last year, mainly reflecting higher cash costs, higher sustaining capital expenditure in line with the tailings compliance programme and the planned reinvestment objectives in the portfolio, COVID-19 impacts, stockpile movements and lower gold sold.
Production for the half year was impacted by an estimated 42,000oz due to COVID-19. Headline earnings of $363m in the first six months of 2021, compared to $404m in the first half of 2020.
Production for the second quarter of 2021 was 613,000oz at a total cash cost of $1,006/oz, compared to 693,000oz at a total cash cost of $767/oz from continuing operations for the second quarter of 2020.
AISC was $1,380/oz for the second quarter of 2021, compared to $985/oz from continuing operations for the second quarter of 2020.The Company generated $67m in free cash flow during the second quarter of 2021 compared to an outflow of $92m in the first quarter of 2021.