Alberto Calderon
ANGLOGOLD ASHANTI Limited (AGA) reported a solid performance for the first quarter of 2022, with production steady year-on-year, an increase in total cash costs limited to 4%, and a strong improvement in cash flow.
Production for the first quarter of 2022 was 588,000 ounces, unchanged from the first quarter of 2021, with strong improvements from the Australian operations offsetting lower production from Kibali, Geitaand also Obuasi, which resumed its underground production ramp-up in January 2022 according to plan.
Output from the Americas region was flat.
Total cash costs for the three months were US$1,041/ounce, up 4% year-on-year driven largely by uncontrollable factors including rising inflation across several categories of input costs and higher royalties – due to the higher gold price received. Inflationary pressure was partly offset by operating improvements and an 8% increase in underground grades.
Free cash flow increased to US$268 million from an outflow of US$92 million in the first quarter of 2021, ensuring the balance sheet remains flexible during an ongoing period of reinvestment in improving its portfolio. The increase in free cash flow was aided by US$326 million received from the Kibali gold mine in the Democratic Republic of the Congo. “We’re starting to achieve our main catalysts,” said Chief Executive Officer Alberto Calderon who added that “There’s still a long way to go, but we’re starting to see an improving operational performance across the portfolio, underpinned by a more focused operating culture and a better grade profile.”
AngloGold Ashanti said it is embedding a new operating model after completing the implementation of an organisation-wide restructuring. It has also introduced new leadership and removed duplicate roles and unnecessary expenditure to reduce costs and improve operating results while a programme of increased investment is underway to improve mining flexibility and extend the lives of its key assets.
The company commenced its Full Asset Potential Review process at the Sunrise Dam mine in Australia and Siguiri mine in Guinea, the first step in achieving a step-change improvement in operating performance and competitiveness, with an additional four sites to undergo the process over the remainder of 2022.
The US$365 million cash acquisition of Corvus Gold Inc. was completed in January 2022, creating a strong foothold in the prospective Beatty district in Southern Nevada which it plans to bring into production in about three years.
The balance sheet remained in a solid position after funding the Corvus acquisition and paying the 2021 year-end dividend, with approximately US$2.5 billion in liquidity, including cash of US$1.0 billion at the end of March 2022.