JOHANNESBURG (miningweekly.com) – The full-year profit of Africa’s biggest gold miner, the JSE-listed AngloGold Ashanti, has surged to a record $1.3-billion and the dividend has been doubled.

The full-year dividend of 380 South African cents a share compares with the 2010 full-year dividend of 145c after AngloGold’s board declared a fourth-quarter dividend of 200c a share, more than double the third-quarter payout of 90c.

“With record earnings of $1.3-billion and stronger cash flow than we’ve ever seen, we’ve laid an exceptionally strong foundation on which to grow the business,” CEO Mark Cutifani said.

The company’s focus is on pushing projects through its pipeline and ensuring continued strong returns for shareholders, Cutifani added.

AngloGold Ashanti eliminated the industry’s last remaining major hedge book in late 2010, improving cash flows and profits by increasing exposure to the rising gold price.

The company said that bullion remained well underpinned by strong demand from emerging markets like China and India, central banks diversifying reserves and investors seeking a haven from global economic turmoil.

Amid rising prices, the company was implementing a new operating model to improve productivity at 20 mines.

Adjusted headline earnings in the 12 months to December 31 rose 65% to $1.3-billion, or US336c a share, compared with $787-million, or US212c the previous year.

Strong performances have been delivered from Geita, in Tanzania, which produced 494 000 oz at $536/oz, and from Obuasi, in Ghana, which managed a 4% increase in production plus a cash contribution.

An operating taskforce began implementing a strategy to improve Obuasi’s operating performance during 2011.

Full-year production of 4.33-million ounces at a total cash cost of $728/oz was in line with revised November guidance.

The board has approved the go-ahead of the second phase of the five-year $395-million Moab Khotsong Zaaiplaats project as well as the five-year $416-million Below 120 Carbon Leader Reef project at Mponeng, which collectively extend the life of AngloGold’s two cornerstone South African mines.

Cash flow generated from AngloGold’s operating activities during the year rose 60% to a record $2.66-billion, while net debt halved to $610-million, improving cash generation, even after funding $1.53-billion 2011 capital expenditure.

Tragically, three employee fatalities were recorded at the Kopanang mine during the quarter, as well as two contractors at Obuasi and another at Gramalote, in Colombia.

AngloGold is implementing additional safety protocols as well as the next phase of its Project One operating model to mitigate safety risk.

Project One introduces planning and scheduling discipline, which in turn improves efficiency and safety.

Fourth Quarter

Fourth-quarter production of 1.114-million ounces at $762/oz was in line with guidance, despite the negative impact of a series of Section 54 safety stoppages ordered by South Africa’s State mine inspector, with these interruptions remaining a significant risk to forecasting production.

Adjusted headline earnings for the three months to December 31 were $295-million, or US76c a share, following a $105-million noncash rehabilitation provision taken over the period and comparing with adjusted headline earnings of $294-million a year earlier and $457-million the previous quarter, when the company benefited from a $70-million tax credit.

2012 Outlook

Full-year 2012 production is forecast at 4.3-million ounces-to-4.4-million ounces at a total cash cost of $780/oz-$805/oz.

Capital expenditure for 2012 is forecast at $1.1-billion on growth projects and $1.1-billion to $1.2-billion on projects to sustain the business, which included implantation of a group-wide enterprise resource planning system. Exploration and feasibility studies are forecast to cost about $380-million.

For the first quarter, typically affected by the slow restart of South African operations following the Christmas break, production is expected to be around 1.03-million ounces at a total cash cost of $820/oz to $835/oz.

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