AngloGold Ashanti bumped up its interim dividend 450% to $0.22 (R4.07) per share after it contained costs, benefited from stronger bullion prices and upped production, factors that boosted cash flows and earnings for the period.
In the previous contrasting half year to June, 2023 AngloGold Ashanti paid a half-year dividend of $0.04. Shares in the company rose 3.26% in afternoon trade on the JSE to R505.98, reversing its 1.57% value loss over the past seven days.
AngloGold Ashanti’s gold production for the 2024 half-year rose 2% over the prior year’s same period 1.25 million ounces. Total cash costs for the period per ounce decreased by 1% to $1 158 per ounce.
This compared to the gold miner’s realised inflation rate for the period of about 6%, representing the sum of price-related increases in cost of goods and services at each site that the company operates. AngloGold Ashanti mines in Tanzania, the DRC, Ghana, Brazil and Australia, among other jurisdictions.
Rod Lowe, a fund manager at AG Capital Value Flexible Fund, described the company’s results for the half year as “outstanding”. He said interim earnings before interest, tax, depreciation and amortisation (Ebitda) in AngloGold Ashanti had risen 65% to $1.1 billion, with CEO Alberto Calderon “promising a much better next six months-period”.
“These results show the hard work that’s been done to improve the fundamentals of our business to drive productivity benefits, and manage costs to ensure we capture the benefit of stronger gold prices,” said Calderon. “We expect to deliver an even stronger second-half performance.”
AngloGold Ashanti attributed the stronger performance to the “significant turnaround at its Brazil operations, which in turn drove significant year-on-year gains in cash flow” and earnings.
Free cash-flows for the first half of 2024 reflected inflows of $206m compared to an outflow of $205m in the same period in the previous year.
“Improved operational performance and strong cost control helped AngloGold Ashanti capture the benefit of a higher average gold price received per ounce,” the company said.
The company’s production in the second quarter to June had bolstered its productivity in the first quarter period of 2024. Gold production for the second quarter rose 12% quarter on quarter to 663 000 ounces compared to 591 000 ounces last year, as its Australian assets recovered from flooding towards the end of the first quarter of 2024. Tropicana’s second quarter gold production improved quarter on quarter by 38% while Sunrise Dam’s output surged by 14%.
At Siguiri, where metallurgical recovery challenges hampered first-quarter performance, second quarter gold production pushed up 67% quarter on quarter.
Across the remainder of the portfolio, improved second-quarter gold production contributions were recorded at Kibali which rose 8%, Iduapriem which was up 6%, Cerro Vanguardia 5%, and Geita 1%.
The company said negotiations for the consummation of the company’s joint-venture project with Gold Fields in Ghana, previously described by Calderon as “complex despite making significant progress” were continuing though no agreement had been reached yet.
AngloGold Ashanti said the proposed Tarkwa/Iduapriem joint-venture project in Ghana would become the biggest gold mine in Africa, with expected bullion production of about 900 000 ounces per year.
BUSINESS REPORT