AngloGold more certain on its future after SA mines sale
The company returns to an unchanged full-year guidance as mines return to pre-Covid production and the SA mines deliver one last quarter of output
21 September 2020 - 09:29
byAllan Seccombe
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
The Mponeng gold mine in Carletonville, Gauteng, is AngloGold Ashanti’s only SA underground mine. Picture: BUSINESS DAY
AngloGold Ashanti expects to fully exit its SA gold by the end of September and, coupled with a handful of its other global mines returning to steady state production, it has reintroduced its full-year guidance after an almost six-month hiatus.
The world’s third-largest gold producer withdrew its annual production and cost guidance on March 27 because of the global response to the Covid-19 pandemic, which caused governments in SA, Argentina, Ghana and elsewhere to close borders, and curtail economic and social activities to slow the spread of the virus.
With the $300m sale of the Mponeng mine — the world’s deepest at 4km below surface — and its tailings retreatment business along with a number of mothballed mines to be concluded at the end of September, AngloGold will record one last full quarter of production from these assets.
AngloGold’s shares have increased by 40% so far in 2020 and were last trading at R445.72.
AngloGold forecast it would report output between 3.03-million and 3.1-million ounces for the year at an all-in sustaining cost of up to $1,120/oz.
The SA mines will contribute 240,000oz of gold for the nine months of 2020 they were in the portfolio, with an all-in sustaining cost of $1,300/oz.
The cost is distorted because of the closure of Mponeng at the end of March, the running costs incurred during the period, and the stop-start nature of its return to production.
In total, the pandemic cost AngloGold 85,000oz of lost production and added $53/oz to all-in sustaining costs.
Taking out the local production to give a sense of what AngloGold will look like from 2021, output is forecast to be between 2.8-million and 2.86-million ounces at an all-in sustaining cost of up to $1,100/oz.
AngloGold had forecast full-year production of up to 3.3-million ounces for 2020, including the SA assets and topping out at 2.865-million ounces without them when it delivered its annual results early in 2020 before the pandemic struck.
In Argentina, the Cerro Vanguardia mine, which AngloGold had put up for sale but later opted to retain, as well as the Serra Grande mine in Brazil have both returned to full production after governments in those countries ordered their temporary closures.
The Obuasi mine’s return to production, after it was shut, redesigned and rebuilt, was slowed by three months because of border closures that have since been lifted.
“We’re pleased to reintroduce guidance, which reflects our greater certainty in relation to full-year operating performance,” said AngloGold Ashanti interim CEO Christine Ramon.
Ramon, who was the CFO, was appointed the temporary CEO after the surprise resignation of Canadian Kelvin Dushnisky barely two years into the job. He cited family interests for his decision.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
AngloGold more certain on its future after SA mines sale
The company returns to an unchanged full-year guidance as mines return to pre-Covid production and the SA mines deliver one last quarter of output
AngloGold Ashanti expects to fully exit its SA gold by the end of September and, coupled with a handful of its other global mines returning to steady state production, it has reintroduced its full-year guidance after an almost six-month hiatus.
The world’s third-largest gold producer withdrew its annual production and cost guidance on March 27 because of the global response to the Covid-19 pandemic, which caused governments in SA, Argentina, Ghana and elsewhere to close borders, and curtail economic and social activities to slow the spread of the virus.
With the $300m sale of the Mponeng mine — the world’s deepest at 4km below surface — and its tailings retreatment business along with a number of mothballed mines to be concluded at the end of September, AngloGold will record one last full quarter of production from these assets.
AngloGold’s shares have increased by 40% so far in 2020 and were last trading at R445.72.
AngloGold forecast it would report output between 3.03-million and 3.1-million ounces for the year at an all-in sustaining cost of up to $1,120/oz.
The SA mines will contribute 240,000oz of gold for the nine months of 2020 they were in the portfolio, with an all-in sustaining cost of $1,300/oz.
The cost is distorted because of the closure of Mponeng at the end of March, the running costs incurred during the period, and the stop-start nature of its return to production.
In total, the pandemic cost AngloGold 85,000oz of lost production and added $53/oz to all-in sustaining costs.
Taking out the local production to give a sense of what AngloGold will look like from 2021, output is forecast to be between 2.8-million and 2.86-million ounces at an all-in sustaining cost of up to $1,100/oz.
AngloGold had forecast full-year production of up to 3.3-million ounces for 2020, including the SA assets and topping out at 2.865-million ounces without them when it delivered its annual results early in 2020 before the pandemic struck.
In Argentina, the Cerro Vanguardia mine, which AngloGold had put up for sale but later opted to retain, as well as the Serra Grande mine in Brazil have both returned to full production after governments in those countries ordered their temporary closures.
The Obuasi mine’s return to production, after it was shut, redesigned and rebuilt, was slowed by three months because of border closures that have since been lifted.
“We’re pleased to reintroduce guidance, which reflects our greater certainty in relation to full-year operating performance,” said AngloGold Ashanti interim CEO Christine Ramon.
Ramon, who was the CFO, was appointed the temporary CEO after the surprise resignation of Canadian Kelvin Dushnisky barely two years into the job. He cited family interests for his decision.
seccombea@businesslive.co.za
Harmony says conditions for AngloGold Ashanti deal have been met
ALLAN SECCOMBE: Bliksem! CEO pay is still going through the roof
Nick Holland to retire from Gold Fields, but his last year will be a busy one
AngloGold’s SA mines bear the brunt of Covid
Companies in this Story
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
AngloGold CEO says categorically he quit for family reasons
Surprise at Kelvin Dushnisky’s AngloGold resignation
AngloGold digs out higher-grade ore as SA mine works at half strength
AngloGold makes a big Covid-19 contribution before its exit
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.