AngloGold loses 11,000oz to coronavirus in Q1 2020

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HARARE – Third largest gold producer globally and the largest on the African continent AngloGold Ashanti opted to keep its Argentina mines instead of selling them as year on year Q1 output fell 11 000oz in the first quarter due to the Covid-19 global pandemic.
AngloGold has 14 mines in nine countries, and the company cited this diversity as the reason for the relatively small loss of production in the first quarter to the pandemic.
The company said that the strong first-quarter tailwind that elevated bullion prices to an average of $1 506/oz had continued to rise in subsequent weeks as investors sought a safe haven.
Group gold output for the March quarter was 716,000oz against 752,000oz for the same quarter a year earlier.
Production was 716 000 ounces at a total cash cost of US$814 per ounce for the quarter to March 31 from 752 000 ounces at US$791 per ounce in the same period last year. All-in sustaining cost was US$1 047 per ounce for the three months compared with US$1 009 per ounce in the same period last year. Geita and Iduapriem delivered stand-out performances, offsetting lower production at Siguiri, Sunrise Dam and AGA Mineração.
Its Serra Grande mine in Brazil, Cerro Vanguardia in Argentina and its South African mines were interrupted during the quarter as governments in those countries took measures to slow the spread of the coronavirus.
AngloGold, under the leadership of Kelvin Dushnisky, has opted to retain the Cerro Vanguardia mines, one of three big asset sales that marked the start of his tenure in September 2018.
“After an extensive sale process and thorough review of the offers received, it has been concluded that the maximum potential value from the remaining resource endowment of the operation will be better realised inside the AngloGold Ashanti,” the company said.
Cerro Vanguardia’s output fell by 13% to 45,000oz during the quarter because of disruptions coming from the pandemic and lower grades.
The sale of the South African assets to Harmony Gold is nearing its completion date at the end of June, while the sale of the Sadiola joint venture operation in Mali is under way.
The company is in a strong cash position of US$1.1 billion after it redeemed the ten-year US$700 million bond and the coupon and has secured additional credit facilities of US$1 billion, providing further liquidity in the event of operational disruptions.
AngloGold has planned for minimal disruptions to its operations by building up four months’ worth of inventories of critical spares and supplies at all its mines, while ensuring there were ore stockpiles to continue feeding processing plants.
AngloGold used private aircraft to fly gold from African operations to Rand Refinery in South Africa for processing and then overseas to clients, ensuring what they called a seamless flow of gold.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 54% to US$473m in the first quarter of 2020, from US$307m in the first quarter of 2019. Operating cash flows more than tripled to US$219m, with growth investment of US$90 million mostly at the Obuasi project as its redevelopment continued and outstanding cash balances available of US$252 million awaiting repatriation from the Democratic Republic of the Congo.

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