JSE-, ASX- and NYSE-listed AngloGold Ashanti nearly doubled its free cash flow to $127-million for the financial year ended December 31, as well as increased its dividend, as a higher gold price and improved efficiencies helped ensure exceptional performances at a number of its key mines.
AngloGold’s safety performance was also the best on record, with a fatality-free 2019, the first time in its history.
During a conference call following the release of the results, the company indicated that this aligned with a consistent safety performance. It assured stakeholders that it would focus on safety to ensure zero harm.
AngloGold had met guidance on its key operating metrics for the seventh straight year; concluded agreements to sell its South African portfolio and the Sadiola mine in Mali; lowered its debt; added reserves at its retained assets after accounting for depletion; and restarted its Obuasi mine, in Ghana, on schedule and within budget.
The yearly dividend increased by 74% to R165 apiece.
“We’re working hard to deliver on our strategy and to capture the wider margin in this strong gold price environment. We’re generating strong cash flow from our operations, and that’s allowing us to increase returns to shareholders, strengthen our balance sheet and invest in our orebodies,” CEO Kelvin Dushnisky said.
AngloGold invested sustaining capital of $494-million in 2019 and has forecast an increase to between $640-million and $670-million this year.
The additional investment will help the company convert existing resources into additional ore reserves and increase development at its key mines.
For 2019, AngloGold produced 3.28-million ounces of gold at a total cash cost of $776/oz.
All-in sustaining costs (AISC) were $992/oz for the year, compared with $976/oz in the previous year.
Headline earnings of $91c apiece were up 72% from the previous year, while free cash flow before capital expenditure on growth projects, rose by 106% to $448-million.
AngloGold reported exceptional performances from its Geita, Kibali, Tropicana and Iduapriem mines, with production and efficiency gains partly offset by operating challenges at its Siguiri and Sunrise Dam mines.
Dushnisky said the gold miner’s balance sheet continued to improve as stronger cash flows had helped with the continued reduction in adjusted net debt.
Adjusted net debt was 5% lower at $1.58-billion at year-end, down from $1.66-billion in the previous year.
GUIDANCE 2020
Production for this year is estimated to be between 3.05-million ounces and 3.30-million ounces.
Total cash costs are estimated to be between $775/oz and $825/oz and AISC between $1 040/oz and $1 100/oz.
Total capital expenditure is anticipated to be between $920-million and $990-million, with the company prioritising investment in growing its ore reserves and improving operating flexibility by investing in ore reserve development and reserve conversion at sites with high geological potential.
The increase in sustaining capital for this year includes around $30/oz to facilitate additional exploration and development.
Two projects are being advanced simultaneously in Colombia, with the completion of feasibility studies expected by year-end 2020 for both Quebradona and Gramalote, the latter now managed by B2Gold.