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AngloGold swings to loss on lower gold sales, higher costs

Lower Gold Sales
March 19, 2024

by nfdeklerk 0 comment

AngloGold swings to loss on lower gold sales, higher costs

Gold miner AngloGold Ashanti recorded a basic loss of $235-million or $0.56 a share, for the year ended December 31, 2023, compared with basic earnings of $233-million, or $0.55 a share, for the prior year.

The company attributed the loss to lower gold sold, higher costs related to the corporate restructuring, higher environmental provisions for legacy tailings storage facilities (TSFs), higher care and maintenance and retrenchment costs associated with the Córrego do Sítio operation, in Brazil, higher operating and exploration costs, higher foreign exchange losses and higher tax expenses.

These effects were partially offset by higher equity-accounted joint venture income, higher finance income, lower impairments and derecognitions in Brazil, and a higher average gold price received per ounce.

AngloGold further recorded a headline loss for the year of $46-million, or $0.11 a share, compared with headline earnings of $489-million, or $1.16 a share in 2022.

Adjusted earnings before interest, taxes, depreciation and amortisation decreased to $1.42-billion for the year under review, compared with $1.79-million in the prior year.

Adjusted net debt, meanwhile, increased to $1.27-billion at year-end from $878-million at the end of 2022.

The year-on-year increase in debt was mainly owing to lower cash generation from operating activities, lower dividends received from the Kibali joint venture in the Democratic Republic of Congo and the one-off costs associated with the corporate restructuring.

Meanwhile, AngloGold on March 19 reported that gold production at the Tropicana gold mine, in Western Australia, had been impacted on by heavy rains and flooding during the month of March.

Tropicana is a joint operation between AngloGold Ashanti (70% and the operator), and AFB Resources (30%).

The area in which the Tropicana gold mine is located received more than 350 mm of rain in a 72-hour period from March 9, almost 50% higher than its average yearly rainfall.

The subsequent flooding interrupted power supply to the processing plant and required mining operations to be temporarily suspended. Power has been restored to the site and access to the underground mine has resumed.

However, mining from the openpits remains restricted until surface water is cleared through pumping and evaporation.

There have been no safety incidents during this period and the mine infrastructure remains sound, the company points out.

The supply road to the Tropicana gold mine is flooded in parts and the processing plant is treating stockpiled ore at a reduced throughput rate. Processing may have to be suspended if consumable stocks at the site are exhausted before the road reopens.

While AngloGold Ashanti anticipates that there may be some impact on gold production at Tropicana in the first half of 2024, any decrease is expected to be largely recovered in the second half of the year.

Consequently, the company does not believe that this event will have an impact on its gold production and cost guidance provided in February, and guidance is therefore maintained.