AngloGold Ashanti produces 613k oz in Q2 2021
AngloGold Ashanti has declared that production for the second quarter of 2021 was 613,000oz of gold 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.
The balance sheet remains in a solid position, with debt falling and ample liquidity of approximately $2.5bn. The ratio of Adjusted net debt to Adjusted EBITDA improved to 0.37 times at 30 June 2021 from 0.73 times at 30 June 2020. The Company remains committed to maintaining a flexible balance sheet with an Adjusted net debt to Adjusted EBITDA target ratio not exceeding 1.0 times through the cycle.
Headline earnings of $363m in the first six months of 2021, compared to $404m in the first half of 2020. Adjusted net debt declined by 41% year-on-year to $850m at 30 June 2021, from $1.431bn at 30 June 2020. The Company has declared a dividend of 87 ZAR cents per share (approximately 6 US cents per share) for the six months ended 30 June 2021.
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.
“AngloGold Ashanti remains focused on its strategy to create long-term value, whilst maintaining a strong balance sheet and mitigating any financial or operating risks to the business.,” Interim Chief Executive Officer, Christine Ramon, said. “Our reinvestment projects remain on track to improve operating flexibility and access to higher grades. We are also pursuing operating and capital efficiencies over the remainder of the year.”
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.
This year and next remain transitional ones for the Company, with the higher volumes of waste stripping and underground development accompanied by lower grades and the movements of stockpiles. The Company expects the mining of lower grades and stockpile utilisation to be transitory in nature as the reinvestment programme provides improved flexibility and access to higher-grades, and as vaccination drives progress across our jurisdictions most affected by COVID-19. Notwithstanding significant pressure on costs related to the tailing storage facilities (TSF) transition in Brazil, this investment is also transitory given the upcoming legal deadline.
Mining activities at Obuasi will remain suspended pending the conclusion of a third-party review of the mining and ground management plans.
On 1 September 2021, Mr. Alberto Calderon will assume the role of Chief Executive Officer of the Company and Ms. Christine Ramon will return to her role as the Company’s Chief Financial Officer.
REVISED GUIDANCE
Group annual guidance for 2021 has been revised as follows: 2.45Moz to 2.60Moz of production at a total cash cost of $890/oz to $950/oz, AISC of $1,240/oz to $1,340/oz and capital expenditure of $1,030m to $1,190m. Production has been revised to mainly remove the contribution of Obuasi for the second half of 2021.
