JOHANNESBURG, SOUTH AFRICA -- (Marketwire) -- 05/07/10 -- AngloGold Ashanti (NYSE: AU)
posted first-quarter adjusted headline earnings of $61 million after a
strong performance from its mines in Tanzania and the Americas helped
offset seasonally lower production from South Africa.
'Our operations in Brazil and Argentina had another strong quarter and the
turnaround progress in the U.S. and Tanzania was also very encouraging,'
Chief Executive Officer Mark Cutifani said. 'Our focus now is to build on
those performances and improve the contribution from our South African
division.'
Production was 1.08Moz at a total cash cost of $619/oz in the three months
to 31 March 2010, compared with production the previous quarter of 1.18Moz
at $598/oz and guidance of 1.07Moz at $655/oz issued by the company in
February. The Brasil Mineracáo operations saw a cost reduction of 12% to
$369/oz, consolidating its position as the company's lowest-cost producer.
Adjusted headline earnings were $61 million, or 17 cents a share in the
first quarter, given seasonally weak production at the South African
operations following the December holiday shutdown. This compares with
fourth-quarter profit of $228 million, or 62 cents a share, which was
boosted by a once-off foreign exchange gain.
'An Incredible Slate of New Projects'
AngloGold Ashanti's board approved a $195m investment to develop its
Córrego de Sítio mine in Brazil, which is expected to reach its commercial
production rate of 140,000oz per annum by 2013.
A decision will be made toward the end of the year on the development of
its new Tropicana project in western Australia, where exploration drilling
has found new sources of gold mineralization near the main project area
which has the potential to both increase the size of the proposed mine and
its life. Negotiations with the state gold mining company of the Democratic
Republic of the Congo were successfully concluded during the quarter,
prompting the initiation of a pre-feasibility study for the proposed
Mongbwalu mine in the country's northeastern Ituri region.
In Colombia, where the company is awaiting water permits to allow
resumption of drilling on its La Colosa deposit, exploration began on
several other targets and talks are underway to determine with joint
venture B2Gold the best way to progress the development of the Gramalote
project.
'We've got an incredible slate of new projects in the Americas, Africa and
Australasia,' Cutifani said. 'Our focus is squarely on developing the
potential that exists within our portfolio.'
'A Strong Vote of Confidence'
AngloGold Ashanti strengthened its balance sheet post the quarter end, with
the first investment-grade issue of a 30-year bond by a South African
corporate. The issue of $300 million of 30-year notes and $700m of 10-year
notes was more than six-times oversubscribed. This $1 billion bond issue
was completed in April, only days after the company agreed with a group of
16 banks to a $1 billion, four-year revolving credit facility (RCF), which
was 1.6 times oversubscribed.
'The overwhelming appetite to provide us with long-term debt demonstrates a
strong vote of confidence not only in AngloGold Ashanti, but also in South
Africa,' Cutifani said. 'Wrapping up a $2 billion refinancing facility at
very competitive interest rates gives us the flexibility to focus on
delivering our operating and growth commitments.'
Production in the second quarter is anticipated to be similar to that of
the first quarter at a total cash cost of $650/oz. This accounts for a
previously announced interruption at the Ghanaian operations to implement a
revised water management strategy and tailings facility upgrade, as well as
a planned decline in output from Sunrise Dam in Australia. Full-year
guidance is maintained at 4.5Moz to 4.7Moz at a cash cost of $590/oz to
$615/oz.
Certain statements made in this communication, including, without
limitation, those concerning AngloGold Ashanti's strategy to reduce its
gold hedging position including the extent and effects of the reduction,
the economic outlook for the gold mining industry, expectations regarding
gold prices, production, cash costs and other operating results, growth
prospects and outlook of AngloGold Ashanti's operations, individually or in
the aggregate, including the completion and commencement of commercial
operations of certain of AngloGold Ashanti's exploration and production
projects, the resumption of production at AngloGold Ashanti's mines in
Ghana, the completion of announced mergers and acquisitions transactions,
AngloGold Ashanti's liquidity and capital resources, and expenditure and
the outcome and consequences of any litigation proceedings or environmental
issues, contain certain forward-looking statements regarding AngloGold
Ashanti's operations, economic performance and financial condition.
Although AngloGold Ashanti believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. Accordingly, results
could differ materially from those set out in the forward-looking
statements as a result of, among other factors, changes in economic and
market conditions, success of business and operating initiatives, changes
in the regulatory environment and other government actions including
environmental approvals and actions, fluctuations in gold prices and
exchange rates, and business and operational risk management. For a
discussion of certain of these factors, refer to AngloGold Ashanti's annual
report for the year ended 31 December 2009, which was distributed to
shareholders on 30 March 2010. The company's annual report on Form 20-F,
was filed with the Securities and Exchange Commission in the United States
on April 19, 2010. AngloGold Ashanti undertakes no obligation to update
publicly or release any revisions to these forward-looking statements to
reflect events or circumstances after today's date or to reflect the
occurrence of unanticipated events. All subsequent written or oral
forward-looking statements attributable to AngloGold Ashanti or any person
acting on its behalf are qualified by the cautionary statements herein.
AngloGold Ashanti posts information that is important to investors on the
main page of its website at
www.anglogoldashanti.com and under the
'Investors' tab on the main page. This information is updated regularly.
Investors should visit this website to obtain important information about
AngloGold Ashanti.
Contacts:
Alan Fine
(Media)
Tel: +27 (0) 11 637 6383
E-mail: Email Contact
Joanne Jones (Media)
Tel: +27 (0) 11 637 6813
E-mail: Email Contact
Sicelo Ntuli (Investors)
Tel: +27 (0) 11 637-6339
E-mail: Email Contact
Stewart Bailey (Investors)
Tel: +1 212 836 4303
or
Tel: +27 82 330 9628
E-mail: Email Contact
