Year of improvement ahead for AngloGold as it seeks to recover from 2021 headwinds

22nd February 2022

By: Donna Slater

Creamer Media Chief Photographer and Senior Contributing Editor


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Gold miner AngloGold Ashanti produced 2.47-million ounces of gold in 2021, down from the 2.8-million ounces produced in the prior year, but within its revised guidance range and at a total cash cost of $963/oz, up from the $790/oz of 2020.

Production was lower mainly as a result of the miner significantly reinvesting across key assets, the temporary suspension of underground mining activities at its Ghana-based Obuasi underground mine, Covid-19 disruptions and secondary impacts of the pandemic, including on the mobility of labour.

AngloGold estimates the impact on its production from Covid-19 in 2021 to be 47 000 oz, compared with 59 000 oz in 2020.

Nonetheless, AngloGold closed the year with an 8% quarter-on-quarter increase in production in the fourth quarter at 659 000 oz.

Quarter-on-quarter, the miner’s Australia-based Sunrise Dam operation increased production by 19% and Tropicana by 16%, while the Brazil-based AGA Mineração operation increased its output by 14% and Serra Grande its output by 50%.

The Guinea-based Siguiri mine’s output increased by 10% quarter-on-quarter and the Ghana-based Iduapriem mine its output by 10%.

Meanwhile, the higher cash costs were the result of lower gold production, the drawdown of ore stockpiles at certain operations, higher operating costs and inflationary pressures.

All-inclusive sustaining costs (AISC) for 2021 increased to $1 355/oz, compared with AISC of $1 037/oz in 2020, mainly owing to an increase in sustaining capital expenditure (capex) and higher total cash costs.

AISC for 2021 included an estimated $34/oz impact resulting from Covid-19 and an estimated $55/oz impact relating to the Brazilian tailings storage facility (TSF) compliance programme.

As for earnings, AngloGold closed out 2021 with $622-million, or $1.48 a share, compared with the $946-million, or $2.25 apiece, of 2020.

Headline earnings for 2021 were $612-million, or $1.46 a share, compared with $1-billion, or $2.38 apiece, at the end of 2020, mainly because of lower gold production, higher operating and exploration costs, as well as $45-million assigned to the care and maintenance of Obuasi.

Other impacts include restructuring and related costs ($18-million), foreign exchange ($43-million) and costs associated with the tender offer for, and subsequent redemption of, the 5.125% notes due this year ($24-million).

These effects were partially offset by the marginally higher gold price received and lower net finance costs ($92-million).

Adjusted earnings before interest, taxes, depreciation and amortisation – impacted by lower ounces of gold sold and higher operating costs, partially offset by the marginally higher gold price received – were $1.8-billion, down from the $2.47-billion of the year prior.

Net cash inflow from operating activities decreased from $1.54-billion in 2020, to $1.26-billion, mainly owing to lower ounces of gold sold and higher operating costs, but partially offset by the marginally higher gold price received, lower cash taxes, higher dividends received and favourable movements in working capital.

As such, Anglogold recorded free cash flow of $104-million for 2021, down from $743-million in 2020.

Adjusted net debt decreased by 10%, from $850-million as at June 30, 2021, to $765-million by year-end. On a year-on-year basis, adjusted net debt increased by 28%.

Total capex (including equity-accounted joint ventures) increased by 45% year-on-year to $1.1-billion in 2021. This increase was largely owing to a 57% increase in sustaining capex to $778-million in 2021, which includes $137-million for the Brazil TSF conversion.

Total growth capex increased by 24% to $322-million in 2021.

Going forward, AngloGold’s production is expected to be weighted towards the second half of the year, with unit costs expected to decline at that time.

AngloGold is targeting production of between 2.55-million and 2.8-million ounces of gold for this year, with the majority of the production growth to come from Obuasi.

Over the rest of its portfolio, the miner foresees marginal improvements in production at Tropicana, Sunrise Dam, Iduapriem and Siguiri, and expects consistent performances at the remaining assets.

AngloGold projects total cash costs of between $925/oz and $1 015/oz and AISC of between $1 295/oz and $1 425/oz for this year.

The miner also expects capex to be between $1.05-billion and $1.15-billion, with sustaining capital forecast at between $770-million and $840-million and nonsustaining capital at between $280-million and $310-million.


AngloGold reports that CFO Christine Ramon has elected to take early retirement from her current role in June, as she takes time off after the death of her husband in 2021 and to spend more time with her family in the near term.

Ramon was appointed CFO and executive director in October 2014 and held the position of interim CEO from September 1, 2020, to August 31, 2021.

In addition, AngloGold has appointed Terry Briggs chief development officer and as a member of its executive committee.

Briggs is set to join AngloGold in April, from Newmont Corporation, where he is currently corporate business planning VP.

AngloGold also reports that its various segment COO positions have been consolidated into a single portfolio under Ludwig Eybers, who previously held the position of international COO.

Eybers was previously technical senior VP and African VP, a position held from December 1, 2014.

Former Africa COO Sicelo Ntuli has chosen to pursue other interests after a distinguished career at AngloGold.

Over about two decades, Ntuli held a number of corporate, technical and operating roles in AngloGold – most recently leading the Africa region through a challenging period including navigating the Covid-19 pandemic.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online


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