/ 17 February 2010

AngloGold swings to fourth-quarter profit

AngloGold Ashanti, the world’s number three gold producer, posted fourth-quarter adjusted headline earnings per share of 62 US cents, from a third-quarter loss when the group took a hit for trimming its forward sales.

South Africa’s AngloGold, Africa’s top gold producer, said output in the fourth quarter was slightly lower at 1,18-million ounces owing to safety stoppages at mines in South Africa.

Total cash costs rose 12% to $598 an ounce.

AngloGold forecast first-quarter production for 2010 at 1,07-million ounces, at a total cash cost of about $660 an ounce.

The Johannesburg-based company posted an adjusted headline loss of 165 US cents per share in the September quarter, when it carried out significant restructuring of its hedge book, and incurred a huge one-off tax cost.

The company has been chipping away at its hedge book — one of the biggest among its peers globally — in order to increase its exposure to rises in the spot price of gold.

Forward sales were cut further, with the overall hedge commitments falling to 3,9-million ounces by the end of last year — less than a year’s production. The company has vowed that by 2014 it will wind up its forward sales.

The group, which has about 20 operations across four continents, said gold production for the year declined by 8% to 4,6-million ounces, the company said in a statement.

For 2010, AngloGold forecast output at between 4,5-million ounces to 4,7-million ounces, with capital expenditure for this year estimated at between $1-billion to $1,1-billion.

AngloGold declared a dividend of 70 South African cents per share for the second half of last year, an increase of 17% from the previous year. — Reuters