AngloGold misses target

Johannesburg - AngloGold Ashanti estimates it produced approximately 1.1 million ounces of gold in the first quarter this year, 2.5% below its previous guidance of 1.13 million ounces.

"They have done well in a wobbly quarter. It's a damn good performance if you ask me," said RBC Capital Markets analyst Leon Esterhuizen.

Gold Fields has also advised the market on its production for the March quarter, but it has missed its stated target by a much bigger margin.

Gold Fields said last week its March quarter production would be 4% high at 871 000 ounces compared to the previous quarter, but Esterhuizen pointed out the company had told the market earlier this year it expected output of 960 000 oz.

"Now that is a substantial miss. AngloGold is nothing to get excited about," Esterhuizen said.

AngloGold said the shortfall in production in the first three months of 2009 is due to the slow start-up of its South African mines after the Christmas break, as well as stoppages undertaken by management to improve safety.

The Geita mine in Tanzania, one of the most troublesome in the AngloGold stable, again had a difficult quarter, with a plant breakdown contributing to the reduction in ounces.

Geita is one of the mines coming under special management attention. CEO Mark Cutifani has told Miningmx if the operation has not improved by year-end AngloGold might dispose of it.

"These issues (at Geita) have now been resolved and all other mines either achieved or exceeded their first-quarter targets with strong performances from Sunrise Dam, Siguiri and Obuasi, which is successfully achieving its turnaround targets," AngloGold said.

"Full-year guidance remains unchanged at 4.9 million to 5.0 million ounces at a total cash cost of $435 to $450 an ounce," it said.

By midday, AngloGold shares on the JSE were trading at R342, down 2.3%.

- Miningmx.com

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