JOHANNESBURG (miningweekly.com) – Gold major AngloGold Ashanti has beaten its second-quarter operational guidance with a gold production of 1 073-million ounces, buoyed by its mines in Africa and the Americas.
The company improved on cost and production guidance for the second quarter and kept its four key growth projects on track and budget despite challenging operating conditions for the global gold sector.
Total cash costs of $801/oz also beat guidance as a consequence of the higher volumes and weaker local currencies.
The full-year outlook anticipates that production will remain 4.3-million ounces to 4.4-million ounces at a total cash cost of $780/oz to $805/oz.
Third-quarter production is expected to be from 1.07-million ounces to 1.1-million ounces at a total cash cost of between $835/oz and $865/oz.
The company achieved record first-half earnings before interest, tax, depreciation and amortisation (Ebitda) of $1.47-billion and adjusted second-quarter headline earnings were $253-million, or US65 c a share.
A revolving credit facility of $1-billion has been refinanced at competitive rates with extended maturity and its $750-million ten-year, investment-grade-rated bond issued at 5.125% has been significantly oversubscribed.
The $335-million Mine Waste Solutions hold out the prospect of additional gold and uranium production.
The expansion of the Cripple Creek & Victor mine in Colorado, as well as the development of the Kibali and Mongbwalu mines in the Democratic Republic of Congo and the new Tropicana mine in Western Australia all remain on track.
Tropicana is expected to be first to production, with its initial gold pour expected in the fourth quarter of 2013.
After seeing Ebitda treble since introducing a new operating model in 2008, AngloGold has strengthened its balance sheet and introduced a business improvement Project One initiative to increase leverage to the gold price and drive consistently higher returns on capital.
The final leg of its strategy is to increase production and improve the quality of the portfolio through the development of the new projects.
“It was a strong operating quarter and we’ve kept our projects firmly on track,” AngloGold Ashanti CEO Mark Cutifani said. “We’ve been driving this business hard to sustainably deliver industry-leading returns and we’re continuing on that path.”
To provide funding for its projects and extend the maturity of its debt, AngloGold Ashanti refinanced its $1-billion revolving credit facility to now mature in 2017 and also completed the successful issue of a $750-million, ten-year investment-grade rated bond at a competitive coupon of 5.125%, below that of its existing rated bonds.
The issue was oversubscribed and completed in a volatile market, amidst a worsening European crisis and shortly after Moody’s issued a negative outlook on three AAA rated European countries.