AngloGold Ashanti shares staged a fightback on Thursday as investors digested its interim production numbers and a return to profit after closing and selling mines in SA.
After an early morning dip of more than 5%, AngloGold’s shares closed up 1.4%.
AngloGold said it expected to report on August 20 interim headline earnings per share (HEPS) of between $0.22 and $0.26 from the matching period’s headline loss per share of $0.22.
AngloGold said that it also expected to report basic earnings per share despite $86m impairments and a $67m “derecognition” of its Mine Waste Solutions uranium plant in SA, which was unlikely to be used under current market conditions.
As part of its disposal and closure process in SA, AngloGold sold its Nufcor uranium processing plant to Harmony Gold. With uranium prices trading at around the $25/pound mark there is little incentive to focus on uranium production.
Gold production for the first half of AngloGold’s financial year is expected to decline to 1.629-million ounces from 1.748-million ounces following the sale of its Moab Khotsong and Kopanang mines to Harmony and China’s Heaven-Sent, as well as closure of TauTona.
“Production from retained operations for the period is expected to increase by 4% to 1.578-million ounces from 1.517-million ounces. This is due to strong production improvements from Sunrise Dam, Kibali, Iduapriem, Mponeng and Tropicana,” the trading statement said.
Mponeng, the deepest mine in the world at 4km below surface, is the sole remaining underground mine AngloGold has in SA. While the mine may have achieved improved production there are questions whether it is making money at subdued rand gold prices.
SA now accounts for 13% of AngloGold’s output and the international assets the remaining 87%.