HomeGoldStrong first quarter for AngloGold Ashanti

Strong first quarter for AngloGold Ashanti

Tau Tona – one of
AngloGold Ashanti’s
South African mines
Johannesburg, South Africa — MININGREVIEW.COM – 18 May 2009 – AngloGold Ashanti Limited – the world’s No. 3 gold producer – has reported adjusted headline earnings of US$150 million (R1.35 billion), or 42 cents a share, in the first quarter of 2009, compared to a loss of US$17 million R153 million),or 5 cents, in the previous quarter.

“The earnings performance shows strong leverage to higher gold prices, even during what is traditionally a slow production quarter,’’ CEO Mark Cutifani said.

“Our strategy of reducing the hedge book by almost half over the past year is yielding real results, giving a good kicker to our received gold price,’’ he added. The company continued with its strategy of reducing the hedge book, delivering 154 000oz against commitments during the quarter. This helped achieve a 5.6% discount to spot gold-prices, improving on the target of a 6% discount this year. Hedge commitments stand at 5.84Moz as of March 31, representing an overall reduction of almost 50% over the past year.

“The improved earnings are due to higher spot gold prices, a lower hedge discount and weaker local operating currencies,’’ chief financial officer Srinivasan Venkatakrishnan said. “We remain committed to reducing the hedge book further and achieving the narrowest possible discount to spot gold prices.’’

Production in the first three months of the year – traditionally the weakest operational period, as it follows the annual 10-day, year-end break at the South African mines – declined by 13% to 1.103Moz from the previous quarter. As indicated in revised guidance issued on April 2, output was further affected by the effective loss of three production days across our entire South African division for safety interventions, and extended maintenance to the mill at the Geita gold mine in Tanzania.

The company pointed out that strong achievements made in improving safety had been marred by two fatalities during the quarter at AngloGold Ashanti’s South African mines. Safety remained the company’s top priority and operational management had continued to make good progress on all fronts during the past year, recording the lowest ever number of lost-time injuries and a 58% decline in the fatality injury frequency rate. Regrettably, the second quarter thus far had been disappointing with four fatalities.