AngloGold CEO Srinivasan Venkatakrishnan exits on a high note with return to profit
AngloGold Ashanti swung back into interim profit, in a busy start to the year in which it sold mines in SA, secured government agreements for a fresh attempt to mine Obuasi, and announced the departure of CEO Srinivasan Venkatakrishnan.
AngloGold, the world’s third-largest gold miner by production, reported a post-tax profit of $43m for the six months to end-June from a loss of $165m in the same period a year earlier.
Revenue fell to $2bn from $2.1bn but a nearly $200m reduction in the cost of sales gave it a gross profit of $410m, from $325m before.
AngloGold reiterated its full-year production target of between 3.325-million and 3.45-million ounces of gold at an all-in sustaining cost of between $990/oz and $1,060/oz.
Venkatakrishnan, who leaves AngloGold at the end of August to become CEO of Indian diversified miner Vedanta Resources, said he expected production for the year to come in at the top end of the forecast and for costs to fall to the lower end of the range.
During the interim period, AngloGold reported cash outflow of $51m compared with $161m a year earlier. Net debt was sharply reduced with the proceeds of the sale of Moab Khotsong to Harmony Gold for $300m in February.
Net debt fell 17% to $1.79bn.
AngloGold has begun a restructuring process it hopes to complete by year-end at its remaining South African assets, the Mponeng deep-level mine and the Mine Waste Solutions tailings retreatment operation. Mponeng was the only unprofitable mine in AngloGold in the interim period.
AngloGold is hoping to sell noncore assets like laboratories and hospitals to reduce its overhead costs.
In Ghana, the government has ratified all the agreements AngloGold needed to redevelop its suspended Obuasi mine, turning it to a modern underground operation after years of losses there.
Venkatakrishnan will be replaced as CEO by Kelvin Dushnisky, who is president and executive director at Barrick Gold, the world’s largest gold mining company.