JOHANNESBURG (miningweekly.com) – Gold mining company AngloGold Ashanti produced more gold in the 12 months to December 31 than in the same period of 2016, but is heading for a basic loss for the period on impairment, retrenchment and silicosis settlement costs, the company said in a trading statement on Wednesday.

Full-year production of 3.755-million ounces last year beat 2016’s 3.628-million ounces and all-in sustaining costs and capital expenditure for the year remain well within the market guidance provided for 2017.
 
But the basic loss for the period is expected to be between $180-million and $200-million, with expected overall headline earnings decreases primarily the result of previously disclosed:

• non-cash impairment and derecognition of certain of the South African assets and goodwill, largely as a result of asset restructuring and disposal, affecting basic after-tax earnings by $221-million or 53c a share;

• retrenchment costs of $71-million or 17c a share; and

• a once-off non-cash provision of the estimated costs of the settlement of the silicosis class action claims of $46-million or 11c a share.

The Johannesburg- and New York-listed company has reasonable certainty of headline earnings of between $16-million and $38-million and headline earnings a share of between 4c and 9c.

Restructuring-linked after-tax impairments of $86-million were reported in June last year, followed by mine-sales announcements in October, which included the sale of the Moab Khotsong mine to Harmony Gold for $300-million.

Also sold to Hong Kong-headquartered Chinese capital management company Heaven-Sent SA Sunshine Investment Company (HSC) for R100-million in cash were the Kopanang mine, the West Gold Plant and related infrastructure, accompanied by the transfer of certain gold-bearing rock dumps from Village Main Reef to AngloGold Ashanti.

HSC holds a 74% interest in Village Main Reef, which operates the Tau Lekoa gold mine in the Vaal river region.

Following the Kopanang sale, production from AngloGold Ashanti’s remaining South African operations, comprising the long life Mponeng mine and the Mine Waste Solutions (MWS) surface operation, will make up less than 15% of the company’s estimated yearly production.

Further, AngloGold Ashanti will no longer have underground mining operations in the Vaal river region.

The long-life MWS tailings retreatment operation, as well as the surface rock-dump reclamation operations in the Vaal river region, will continue to be treated through the Kopanang gold plant, which will be retained by AngloGold Ashanti.

Carrying values have been impaired at $110-million net of deferred tax, or 26c a share.

The trust formed in 2016 to compensate a group of former Anglo American South Africa and AngloGold Ashanti employees who suffer from silica-related illnesses, has already distributed about R102-million of a R395-million settlement.

AngloGold Ashanti will release the results for the year ended December 31 on February 20.