Print this page Email this link Decrease font size Increase font size
You are here: Home > 2005 > AngloGold Ashanti Results - Quarter Ended 31 March 2005

AngloGold Ashanti Results - Quarter Ended 31 March 2005


Acrobat Version
Friday, April 29, 2005
Key features:
  • Price received improved $29/oz (7%) quarter-on-quarter to $424/oz, following the hedge restructure.
  • Production reduced by 5% to 1.569Moz (after adjusting for the closure of Ergo), predominately due to lower South African production and after strong performances at Morila and Cerro Vanguardia in the prior quarter.
  • Former Ashanti assets Obuasi, Iduapriem and Geita delivered improved production, while Sunrise Dam in Australia reported record production.
  • Total cash costs increased by 4% to $284/oz, due to lower gold produced, stronger operating currencies and inflationary pressures in most operating regions.
  • Headline earnings adjusted for the effect of unrealised non-hedge derivatives were $77m.
Commenting on AngloGold Ashanti's performance, CEO Bobby Godsell said the restructuring of the hedge announced in January had "delivered the intended positive impact on our received price more closely matching the average spot price for the quarter".

He explained that, following its long planned closure, Ergo was being treated as a discontinued operation. Last quarter's numbers had been restated to exclude Ergo and on this basis production was down 5% to 1.569Moz while total cash costs increased by 4% to $284/oz due to lower gold produced, stronger operating currencies and inflationary pressures in most operating regions.

In respect of the former Ashanti assets, he noted that this quarter had seen improvements in many areas. After five quarters of decline, gold production at Obuasi increased by 2% to 92,000 ounces with tonnage treated up 10% on the previous quarter. "I'm pleased to say that during April, underground grades at Obuasi have improved by 1g/t and management expects production to show progressive increases in each of this year's remaining quarters," he said.

While production at Siguiri was constant quarter-on-quarter, total cash costs improved 9%. At Iduapriem, production improved 10% with cash costs down 19%. Similarly, Geita saw production up slightly with total cash costs down 19%. "These improving trends across the Ashanti assets are important and give me much encouragement about what these assets can contribute to this company as the year progresses," Godsell commented.

Referring to margins, he observed that it was undoubtedly a great frustration for investors that as the gold price had risen over the past year, margins in gold companies had shrunk. One of the drivers of the higher gold price was the weaker US dollar, which in turn meant stronger operating currencies in almost all of AngloGold Ashanti's producing regions including Australia, Argentina, Brazil, Namibia and South Africa. Added to this, significantly higher oil prices and the growth demands of China had translated into price inflation in many of the company's consumables such as cement, tyres and steel. Quantum increases in the cost of contract mining were also being seen.

"The net impact for this company is higher total cash costs expressed in US dollar terms and reduced margins. This is the challenge that we have to take head on as we seek to improve our returns to investors," he said. "This year we have budgeted for a further $50 million in cost savings, following the $50 million in savings we achieved last year. In light of the continuous cost pressure evident this quarter, additional measures are being implemented to ensure that the company reaches its published total cash cost target for the year of $273/oz."

View the full report, or contact skblackman@anglogoldashanti.com should you prefer to receive the Report in PDF format via e-mail.

Queries
  Tel: Mobile E-mail:
South Africa
Steve Lenahan +27 (0) 11 637 6248 +27 (0) 83 308 2200 slenahan@AngloGoldAshanti.com
Michael Clements +27 (0) 11 637 6647 +27 (0) 82 339 3890 mclements@AngloGoldAshanti.com
Shelagh Blackman +27 (0) 11 637 6379 +27 (0) 83 308 2471 skblackman@AngloGoldAshanti.com

USA
Charles Carter Toll Free 800 417 9255 + 1 212 750 7999 cecarter@AngloGoldAshanti.com

Australia
Andrea Maxey + 61 8 9425 4604 + 61 438 001 393 amaxey@AngloGoldAshanti.com

Disclaimer

Except for historical information contained herein, there are matters discussed in this news release that are forward-looking statements. Such statements are only predictions and actual events or results may differ materially. For discussion of important factors including, but not limited to development of the Company's business the economic outlook in the gold mining industry, expectations regarding gold prices and production, and other factors, which could cause actual results to differ materially from such forward-looking statements, refer to the Company's annual report on the Form 20-F for the year ended 31 December 2003 which is filed with the Securities and Exchange Commission on 19 March 2004.



 
[top]
©  2014  AngloGold Ashanti Limited

Developed by 3fifteen | Designed by Russell and Associates