Anglogold Ashanti has stated that it has set new safety records and achieved its first ever March quarter without a fatal accident, as it reported operating results for the three months to 31 March, 2017.
According to the Chief Executive Officer of AngloGold Ashanti, Srinivasan Venkatakrishnan, the gold mining company also maintained its full-year guidance.
AngloGold Ashanti, which operates the world’s deepest mines, has passed 282 days without a fatal accident in South Africa, surpassing a previous record of 242 days, set in 2014.
He stated that Sadiola, Yatela, Siguiri, Iduapriem, Obuasi, and Sunrise Dam ended the March quarter injury free, and the South African Operations have now exceeded five million consecutive shifts without a fatality.
He said the production was 830,000oz at an average total cash cost of $813/oz, compared to 861,000oz at $702/oz in the first quarter of 2016, with costs pushed higher by lower grades and significantly stronger currencies in key operating regions.
The company’s international operations, which account for almost three-in-four of its gold ounces mined, delivered another good quarter, according to their plans, whilst the South African Operations, with the exception of Mponeng, had a poor production performance in the seasonally weak first quarter.
“Our International Operations have again delivered a strong result, with our brownfields investments proceeding to plan.
“On the back of the strong safety result, we are closely scrutinising the underperforming areas of our South African Operations to restore margins. Remedial steps taken to ensure they recover from a difficult start to the year are already bearing fruit,” said Mr. Venkatakrishnan.
This year, Mr. Venkatakrishnan disclosed that AngloGold Ashanti was re-investing in high-return, brownfields projects to improve the overall quality of its portfolio and extend mine lives.
The company has in recent years rebuilt its balance sheet without diluting shareholders, through tight cost management, efficiency improvements and debt reduction, all while making significant improvements to safety.
“Net debt improved by 3% from the first quarter of last year to US$2.05 bn. Balance sheet flexibility was also maintained, with net debt to adjusted earnings before interest, tax, depreciation and amortisation remaining within its own target of 1.5 times, through the business cycle, and well below its debt covenants of 3.5 times,” he noted.
He mentioned that AngloGold Ashanti has ample liquidity of $1.46bn, with no near-dated maturities, and sufficient covenant headroom.
He pointed out that the production from the International Operations was 632,000oz at a total cash cost of $714/oz for the first quarter of 2017, up from 625,000oz at a total cash cost of $674/oz in the corresponding period last year.
This increase, he explained reflected solid performances across the portfolio, with exceptional performances from Siguiri, Iduapriem, Kibali and Cerro Vanguardia.
He indicated that all-in sustaining costs (AiSC) for the first quarter were $963/oz, up from $822/oz for the first quarter of 2016, with the increase attributable to the impact of stronger local currencies, lower average grades and the planned increase in sustaining capital expenditure.
He said the total capital expenditure (including equity accounted entities) during the first quarter of 2017 was $216m, up from $128m for the first quarter of 2016.
Additionally, he said the total capital expenditure included $186m of sustaining capital expenditure and $30m of project capital expenditure.
He asserted that the capital expenditure is expected to increase in the remaining three quarters of the year, in line with historical seasonal trends.
The added focus on a safe start-up, according to him contributed to an unusually slow ramp-up in South Africa, after the year-end break.
This, Mr. Venkatakrishnan noted was compounded by more lower-grade areas mined at some operations than planned, fractured ground in areas currently being mined at TauTona and Moab Khotsong and instances of unwarranted deviations from mining plans.
Steps taken to address the poor adherence to mining plans, management work routines and to improve productivity, according to him, have already resulted in an improvement in mineable face length, leading to production volume recoveries in the second half of the first quarter of 2017.
He pointed out that these improvements will also contribute to the forecast for an overall increase in production rates over the remainder of the year.
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