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AngloGold reports smaller loss

Johannesburg - AngloGold Ashanti [JSE:ANG] reported a narrower loss for the second quarter on Monday, as its domestic mines led bullion production higher and it slashed costs.

AngloGold said adjusted headline earnings for the April-June quarter totalled a loss of $4m, compared with a loss of $135m in the same period a year earlier.

Production was 1.098 million ounces, an increase of 17%. This was ahead of its forecast and a 4% advance from the prior quarter.

Production at AngloGold's South African mines was assisted by a first-time contribution from its new Tropicana and Kibali mines.

Costs were cut mostly in marketing and explorations, resulting in an improvement in cash flow, the company said.

Safety excellence

“This is another strong result for us, with growth in production and lower costs across the board,” said CEO Srinivasan Venkatakrishnan. “But it’s the continued improvement in safety that we’re most proud of, and where we intend to do better still.”

AngloGold, which plans to grow production this year for the first time in almost a decade, has made significant cuts to overhead costs and also realised significant savings in operating expenditure and capital expenditure, as it seeks to improve free cash flow and returns. At the same time the company has posted a record safety performance.

No fatalities were reported during the quarter for the third time in AngloGold Ashanti’s history and the first time since 2010.

The company is investing in a targeted exploration programme and technologies to improve underground productivity on its South African mines, which account for roughly 28% of total production.

Earthquake

Meanwhile, AngloGold Ashanti said it was in the process of safely restarting its Great Noligwa and Moab Khotsong mines, which were halted following a 5.3 magnitude earthquake that originated in the vicinity of the town of Stilfontein on August 5.

“Safety remains the top priority in restarting these operations as we ramp-up production levels, which will take some time to complete,” said chief operating officer Mike O’Hare. “At no point will safety be compromised.”

The company said it was actively involved with local government and civic organisations in providing assistance where necessary as the local community continues to recover from this incident.

- Fin24 and Reuters.
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