AngloGold achieves full-year strategic objectives, but earnings fall

15th February 2023

By: Tasneem Bulbulia

Senior Contributing Editor Online


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Gold miner AngloGold Ashanti says in a trading statement for the year ended December 31 that it delivered on its key strategic objectives during 2022, achieving improvements in production, cash flow and safety performance.

AngloGold achieved guidance for production, capital expenditure and all-in sustaining costs for the period.

Production for 2022 is expected to be 2.74-million ounces, compared with 2.47-million ounces in 2021, ending 2022 in the top half of the guidance range. In addition, the Obuasi gold mine, in Ghana, is expected to achieve its production guidance of 250 000 oz.

Total cash costs are expected to be less than 1% above the yearly guidance range despite significant volatility in the macro environment impacting input pricing and inflation across the company’s industry.

The operational improvements followed solid performances across the portfolio, underpinned by an improving grade profile amidst the ongoing reinvestment programme, and with Obuasi continuing its planned ramp-up, AngloGold highlights.

AngloGold Ashanti says it has reasonable certainty that headline earnings for the period are expected to be between $530-million and $560-million, with headline earnings per share (HEPS) of between $1.26 and $1.33, a decrease of between 8% to 13% from the comparative period.

Headline earnings and HEPS for the comparative period in 2021 were $612-million and $1.46, respectively.

Basic earnings for the period are expected to be between $280-million and $315-million, resulting in total basic earnings per share (EPS) of between $0.67 and $0.75, a decrease of between 49% to 55% from the comparative period.

The basic earnings and EPS for the comparative period were $622-million and $1.48, respectively.

The expected decrease in basic earnings for the period compared to the comparative period is owing mainly to non-cash impairments recognised at the company’s Brazilian operations, relating to Córrego do Sítio as previously reported, Serra Grande and Cuiabá, cumulatively affecting basic earnings unfavourably by $246-million net of tax, or $0.59.

Tailings-related regulations introduced in Brazil in 2022 required AngloGold Ashanti Brazil to conduct a new detailed risk assessment of its portfolio of tailings storage facilities (TSFs). The regulations required this new risk assessment be conducted with oversight from an independent expert.

One of the findings of this review was to increase buttressing of the Calcinados TSF to align its post-liquefaction factor of safety with the standard applied in Canada, which is currently considered best practice.

AngloGold Ashanti informs that it will proceed with this buttressing programme and has therefore suspended filtered tailings deposition on the facility, which services the Cuiabá Mine Complex.

It is important to note that the operational and structural integrity of the Calcinados TSF remains safe and stable, per the conclusions of recent assurance assessments by independent tailings experts and the company’s own TSF team, the company says.

The facility’s factors of safety – in both a drained and undrained state – are indicated by the company to be fully compliant with relevant Brazilian operating regulations.

Information on the timeline for the completion of this buttressing programme is expected to be provided after engineering and geotechnical work has been completed by independent tailings experts.

Processing of gold concentrate at the Queiroz plant, which also services the Cuiabá Mine Complex, will also be suspended until this buttressing programme has been completed.

In the meantime, mining of ore is continuing at the Cuiabá Mine Complex. During this period, the company expects that both sites will continue to extract gold from the gravity circuit at a rate of 5 000 oz on average monthly and will produce gold in concentrate at an average of about 10 000 oz a month, with options being assessed to sell gold concentrate until the Queiroz plant resumes operation.

The company will release its results on February 22.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online


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