/ 15 May 2009

AngloGold earnings rise on gold price

AngloGold Ashanti, the world’s number three producer, posted improved earnings for the first quarter of this year on the back of a higher gold price, and trimmed its hedge book further.

AngloGold’s earnings came bang in line with market consensus — it reported adjusted headline earnings of $150-million or 42 cents a share in the period to end-March compared with a loss of $17-million or five cents a share in the quarter to end-December.

A Reuters survey average of five analysts showed they expected AngloGold to post adjusted headline EPS of 42 US cents in its first quarter to end of March.

Hedge book commitments by AngloGold were reduced by a further 154 000 ounces, the group said in a statement.

The hedge book, or forward sales, stood at 5,84-million ounces as of March 31, representing an overall reduction of almost 50% over the past year.

First quarter production was at 1,103-million ounces, in line with AngloGold’s guidance, and was lower than the 1,268-million ounces the group produced in the December quarter.

”The improved earnings are due to higher spot gold prices, a lower hedge discount and weaker local operating currencies,” chief financial officer Srinivasan Venkatakrishnan said.

”We remain committed to reducing the hedge book further and achieving the narrowest possible discount to spot gold prices.”

Total cash costs for the group were well contained from the prior quarter, rising 5% to $445/ounce, in line with initial guidance. – Reuters