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AngloGold has better Q2 than expected

The Mponeng mine,
which produces
500 000ozpa for
Johannesburg, South Africa — MININGREVIEW.COM — 13 August 2010 – AngloGold Ashanti “’ the world’s third largest and Africa’s top gold miner “’ has posted better-than-than expected earnings in the second quarter of 2010, and the company expects a rise in third-quarter output.

Revealing this in a results statement published here, the company “’ which has around 20 operations across four continents “’ said earnings had been boosted by higher production, especially in South Africa, and a rise in bullion prices.

“This is the kind of earnings growth we can generate when our operations start firing on all cylinders,” chief executive Mark Cutifani said in the statement. “With that performance and a strong gold price as we continue to reduce the hedge book, medium to long-term cash generation potential is significant.”

AngloGold revealed that adjusted headline earnings per share had risen to 35 U.S. cents per share for the June quarter “’ well above the consensus forecast of 29 U.S. cents “’ and compared with adjusted earnings of 17 U.S. cents in the March quarter.

Analysts had forecast a strong set of results for AngloGold and its South African peers, betting on higher output and prices to offset increased electricity tariffs and a new revenue-based royalty charge.

The price of gold in the June quarter rose US$85 an ounce, or 8%, to a record average of US$1 195 per ounce from the previous three-month period. The rand gold price also gained 8% during the quarter to R289 300 a kg.

AngloGold said second-quarter production had risen to 1.126 million oz, above its own forecast of a flat quarter-on-quarter production of 1.08 million oz. Total cash costs had fallen to US$617 per ounce from US$619 an ounce the previous quarter.

The company said its full-year guidance remained unchanged at 4.5 to 4.7 million oz at a total cash cost of US$590 to US$615 per ounce, while it expected a rise in output for the next quarter.