AngloGold Ashanti reported a significant increase in its interim dividend and free cash flow, driven by elevated gold prices and operational improvements. The company’s interim dividend rose by 450%, and free cash flow reached $206 million, a stark contrast to the $205 million outflow in the first half of 2023.
First-half earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 65% to $1.118 billion from $676 million. The Denver-headquartered gold mining company continues to enhance its valuation through cost performance, cash conversion, and extending the life of key mines.
“We expect an even stronger second-half performance,” said CEO Alberto Calderon in a Johannesburg Stock Exchange news announcement. “Our restructuring in Brazil after sustained losses laid the foundation for this improvement.”
Total year-on-year cash costs per ounce fell 1%. Full-year guidance remains unchanged due to an improved second-half outlook. Calderon attributed the positive results to “the hard work done to improve our business fundamentals.”
First-half gold production increased by 2% to 1.25 million ounces, with total cash costs per ounce dropping 1% to $1,158. Group all-in-sustaining costs (AISC) per ounce rose 2% to $1,589, reflecting a 6% inflation rate for price-related increases in the cost of goods and services.
For subsidiaries, total cash costs per ounce improved 1% to $1,200, while joint ventures (JVs) saw a 2% improvement to $866. AISC per ounce for subsidiaries rose 2% to $1,658, and for JVs by 2% to $1,078.
AngloGold’s Americas segment, including Mineração (Cuiabá), Serra Grande, and Cerro Vanguardia, saw a 10% increase in gold production to 257,000 ounces. Total cash costs per ounce in this business unit improved 18% to $974. AISC per ounce in South America improved 27% to $1,414, with a strong turnaround in free cash flow, recording an inflow of $149 million from an outflow of $127 million last year.
Second Quarter Performance Bolsters Results
Gold production in the second quarter rose 12% to 663,000 ounces, recovering from first-quarter flooding in Australia. Tropicana’s second-quarter production increased by 38%, and Sunrise Dam’s by 14%. In Guinea, Siguiri saw a 67% increase in second-quarter gold production after metallurgical recovery challenges in the first quarter.
Other portfolio improvements included an 8% increase in gold production at Kibali in the Democratic Republic of Congo, 6% at Iduapriem in Ghana, 5% at Cerro Vanguardia in Argentina, and 1% at Geita in Tanzania. At Obuasi in Ghana, second-quarter gold production was 54,000 ounces, with a 7% increase in underground ore tonnes treated.
Higher Gold Prices Boost Earnings
First-half basic earnings rose significantly due to higher gold sales, better average gold prices, lower operating costs, and reduced impairments. Basic earnings were $311 million, or $0.74 per share, compared with a basic loss of $39 million, or $0.09 per share, in the same period last year.
Following the improved performance, AngloGold declared an interim dividend of 22 cents per share, compared to 4 cents per share in the first half of 2023.
Safety Incident at Geita
Despite the strong financial performance, AngloGold reported a fatal accident at its Geita mine. A contractor was killed in May when his vehicle overturned. The company conducted an in-depth investigation and identified steps to prevent future incidents.
Source: Mining Weekly
