AngloGold second-quarter earnings beat consensus

AngloGold Ashanti, the world’s third-largest and Africa’s top gold miner, on Thursday posted better-than-than expected second-quarter earnings and said it expects a rise in third-quarter output.

AngloGold, which has about 20 operations across four continents, said earnings were boosted by higher production, especially in South Africa, and a rise in bullion prices.

“This is the kind of earnings growth we can generate when our operations start firing on all cylinders,” chief executive Mark Cutifani said in a statement.

“With that performance and a strong gold price as we continue to reduce the hedge book, medium- to long-term cash-generation potential is significant.”

AngloGold said adjusted headline earnings per share rose to 35 US for the June quarter, above the consensus forecast of 29 US cents, and compared with adjusted earnings of 17 US cents in the March quarter.

Headline earnings are the key profit measure in South Africa, stripping out some one-off and non-trading items.

Analysts had forecast a strong set of results for AngloGold and its South African peers, betting on higher output and prices to offset increased electricity tariffs and a new revenue-based royalty charge.

The price of gold in the June quarter rose $85 an ounce, or 8%, to a record average of $1 195 per ounce from the previous three-month period. South African gold producers sell their gold in dollars and pay their costs in rands.

The rand gold price also gained 8% during the quarter.

AngloGold said second-quarter production rose to 1,13-million ounces, above its own forecast of a flat quarter-on-quarter production of 1,08-million ounces.

Total cash costs fell to $617 per ounce from $619 an ounce the previous quarter.

AngloGold said its full-year guidance remains unchanged at 4,5-million to 4,7-million ounces at a total cash cost of $590 to $615 per ounce, while it expects a rise in output for the next quarter.

“Third-quarter production is anticipated at 1,15-million ounces at a total cash cost of $645 per ounce,” it said, adding that the forecast accounts for annual wage increases and winter power-tariff adjustments in South Africa. — Reuters

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