SOURCE: AngloGold Ashanti
JOHANNESBURG, SOUTH AFRICA--(Marketwire - Aug 6, 2012) -
- Q2 production 1,073Moz beats guidance; strong performances from
Continental Africa and Americas.
- Q2 total cash costs $801/oz, better than guidance due to improved
volumes, weaker local currencies.
- Q2 Adjusted headline earnings of $253m, or 65 US cents a share.
- Projects on budget and on schedule; Tropicana first gold expected by
end of next year.
- Completed acquisition of residual 50% stake in Serra Grande.
- Record First-Half EBITDA of $1.47bn achieved in seasonally weaker first
- Revolving Credit Facility of $1bn refinanced at competitive rates and
- $750m 10-year, investment-grade rated bond issued at 5.125% coupon(3);
- Completed acquisition of Mine Waste Solutions ($335m) for additional
gold and uranium production.
AngloGold Ashanti (NYSE: AU) improved on cost and production guidance for
the second quarter and kept its four key growth projects on track and
budget despite challenging operating conditions for the global gold sector.
The expansion of the Cripple Creek & Victor mine in Colorado, as well as
the development of the Kibali and Mongbwalu mines in the Democratic
Republic of Congo and the new Tropicana mine in Western Australia all
remain on track. Tropicana is expected to be first to production, with its
initial gold pour expected in the fourth quarter of 2013.
AngloGold Ashanti has seen earnings before interest, tax, depreciation and
amortization increase almost threefold since introducing a new operating
model in 2008. The company has eliminated its hedge book to gain full
exposure to the gold price, strengthened its balance sheet and introduced
its Project ONE business improvement initiative to increase leverage to the
gold price and drive consistently higher returns on capital. The final leg
of its strategy is to increase production and improve the quality of the
portfolio through the development of the new projects.
"It was a strong operating quarter and we've kept our projects firmly on
track," AngloGold Ashanti Chief Executive Officer Mark Cutifani said.
"We've been driving this business hard to sustainably deliver
industry-leading returns and we're continuing on that path."
To provide funding for its projects and extend the maturity of its debt,
AngloGold Ashanti refinanced its $1bn revolving credit facility to now
mature in 2017 and also completed the successful issue of a $750m, 10-year
investment-grade rated bond(3) at a competitive coupon of 5.125%, below
that of its existing rated bonds. The issue was significantly
oversubscribed and completed in a volatile market, amidst a worsening
European crisis and just days after Moody's issued a negative outlook on
three AAA rated European countries.
Adjusted headline earnings in the three months to June 30 were $253m, or 65
US cents a share, compared with $342m, or 89 US cents the previous year.
The difference in adjusted headline earnings was caused, in part, by
planned higher expenditure on exploration and corporate costs; a higher tax
charge, given that the benefit of hedge and other losses have been
utilised; and the once-off benefit of $30m to adjusted headline earnings a
year earlier, from the sale of the Ayanfuri royalty. Gold price received
fell 5% for the quarter to $1607/oz.
Production during the quarter was 1.073Moz at a total cash cost of $801/oz,
better than guidance of 1.04Moz at $840/oz-$845/oz. The operating result
was assisted by strong performances from the Continental Africa and
Americas region, as well as a recovery from the South African operations,
which experienced fewer safety-related stoppages. Section 54 and safety
related stoppages at the group's South African operations continue to pose
a threat to production rates from the region.
Tragically, five employee fatalities were recorded at incidents at the
Great Noligwa, Mongbwalu and Obuasi and at TauTona. The company remains
committed to eliminating occupational injuries at its mines through the
continued implementation of its Project ONE operating model and improvement
of safety and risk management protocols. Success to date is evident in its
all accident frequency rate, which at 8.39 per million hours worked for the
year to date represents a 60% improvement since 2007.
Full year(1) 2012 expected production remains 4.3Moz-4.4Moz at a total cash
cost of $780/oz -$805/oz. For the third quarter(2), production is expected
to be around 1.07Moz-1.1Moz at a total cash cost of $835/oz - $865/oz.
- (1) Assuming an exchange rate of R7.40/$ and an oil price of $110/barrel
for the year.
- (2) Assuming an exchange rate of R8.15/$ and an oil price of $100/barrel.
- (3) Bond carries effective yield to maturity of 5.2032%
As mentioned in the first quarter earnings release in 15 February 2012, the
situation remains that both estimates could see some downside risk in the
light of safety-related stoppages and other unforeseen factors. AngloGold
Ashanti may not be able to reach the goals or meet the expectations set out
in this report. Refer to the disclaimer in this communication or to the
"Risk Factors" section in the prospectus supplement to AngloGold Ashanti's
prospectus dated July 17, 2012 that was filed with the Securities and
Exchange Commission on July 25, 2012.
About AngloGold Ashanti
AngloGold Ashanti is a global gold mining company and the world's third
largest gold producer. Headquartered in Johannesburg, South Africa,
AngloGold Ashanti has 20 operations on four continents and one of the gold
industry's most successful exploration teams which work across both the
established and new gold producing regions of the world. This includes land
positions in Colombia, Egypt, Guinea, Australia and the Solomon Islands,
among others. AngloGold Ashanti employed 61,242 people, including
contractors, in 2011 and produced 4.33Moz of gold, generating $6.6bn in
gold income. Capital expenditure in 2011 amounted to $1.5bn. As at 31
December 2011, AngloGold Ashanti's Ore Reserve totalled 75.6Moz.
The primary listing of the company's ordinary shares is on the JSE Limited
(JSE). Its ordinary shares are also listed on stock exchanges in London and
Ghana, as well as being quoted in New York in the form of American
Depositary Shares (ADSs), in Australia, in the form of CHESS Depositary
Interests (CDIs) and in Ghana, in the form of Ghanaian Depositary Shares
SPONSOR: UBS South Africa (Pty) Limited
Certain statements made in this communication, other than statements of
historical fact, including, without limitation, those concerning 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 achievement of project milestones, the
completion and commencement of commercial operations of certain of
AngloGold Ashanti's exploration and production projects and the completion
of acquisitions and dispositions, AngloGold Ashanti's liquidity and capital
resources and capital expenditure and the outcome and consequence of any
potential or pending litigation or regulatory proceedings or environmental
issues, are forward-looking statements or forecasts regarding AngloGold
Ashanti's operations, economic performance and financial condition. These
forward-looking statements or forecasts involve known and unknown risks,
uncertainties and other factors that may cause AngloGold Ashanti's actual
results, performance or achievements to differ materially from the
anticipated results, performance or achievements expressed or implied in
these forward-looking statements. Although AngloGold Ashanti believes that
the expectations reflected in such forward-looking statements or forecasts
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 and other
factors, refer to AngloGold Ashanti's annual report for the year ended 31
December 2011, which was distributed to shareholders on 4 April 2012, the
company's 2011 annual report on Form 20-F, which was filed with the
Securities and Exchange Commission in the United States on 23 April 2012
and the prospectus supplement to the company's prospectus dated July 17,
2012 that was filed with the Securities and Exchange Commission on July 25,
2012. These factors are not necessarily all of the important factors that
could cause AngloGold Ashanti's actual results to differ materially from
those expressed in any forward-looking statements. Other unknown or
unpredictable factors could also have material adverse effects on future
results. Consequently, stakeholders are cautioned not to place undue
reliance on forward-looking statements. 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, except to the extent
required by applicable law. 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.
This communication may contain certain "Non-GAAP" financial measures.
AngloGold Ashanti utilises certain Non-GAAP performance measures and ratios
in managing its business. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the reported operating results
or cash flow from operations or any other measures of performance prepared
in accordance with IFRS. In addition, the presentation of these measures
may not be comparable to similarly titled measures other companies may use.
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