(“AngloGold Ashanti’, “AGA” or the “Company”) reported a solid performance for the first quarter of 2022, with production steady year-on-year, an increase in total cash costs limited to 4%, and a strong improvement in cash flow. The Company remains on track to achieve full-year guidance.
Production for the first quarter of 2022 was 588,0000z, unchanged from the first quarter of 2021, with strong improvements from the Australian operations offsetting lower production from Kibali, Geita and also Obuasi, which resumed its underground production ramp-up in January 2022 according to plan. Output from the Americas region was flat.
Total cash costs for the three months were $1,041/oz, up 4% year-on-year driven largely by uncontrollable factors including rising inflation across several categories of input costs and higher royalties – due to the higher gold price received. Inflationary pressure was partly offset by operating improvements and an 8% increase in underground grades.
Free cash flow increased to $268m from an outflow of $92m in the first quarter of 2021, ensuring the balance sheet remains flexible during an ongoing period of reinvestment in improving its portfolio.
The increase in free cash flow was aided by $326m received from the Kibali gold mine in the Democratic Republic of the Congo.
“We’re starting to achieve our main catalysts,” said Chief Executive Officer Alberto Calderon. “There’s still a long way to go, but we’re starting to see an improving operational performance across the portfolio, underpinned by a more focused operating culture and a better grade profile.”
AngloGold Ashanti is embedding a new Operating Model after completing the implementation of an organisation-wide restructuring. The Company has introduced new leadership and removed duplicate roles and unnecessary expenditure to reduce costs and improve operating results. A programme of increased investment is underway to improve mining flexibility and extend the lives of its key assets.
The Company commenced its Full Asset Potential Review process at the Sunrise Dam mine in Australia and Siguiri mine in Guinea, the first step in achieving a step-change improvement in operating performance and competitiveness, with an additional four sites to undergo the process over the remainder of 2022.
The $365m cash acquisition of Corvus Gold Inc. (“Corvus”) was completed in January 2022, creating a strong foothold in the prospective Beatty district in Southern Nevada which it plans to bring into production in about three years.
The balance sheet remained in a solid position after funding the Corvus acquisition and paying the 2021 year-end dividend, with approximately $2.5bn in liquidity, including cash of $1.0bn at the end of March 2022.
- On track to meet guidance ranges for 2022
- First quarter production flat year-on-year at 588,0000z; strong contributions from Sunrise Dam, Cerro Vanguardia, Siguiri and Tropicana
- Underground grade improved 8% year-on-year as portfolio reinvestment initiatives progressed
- Total cash costs increased 4% year-on-year, below inflation, to $1,041/oz in Q1 2022
- All-in sustaining costs (“AISC”) increased 9% year-on-year to $1,405/oz in Q1 2022, mainly due to planned higher sustaining capital expenditure and increased total cash costs
- Adjusted EBITDA decreased 2% year-on-year to $438m in Q1 2022; Adjusted EBITDA margin of 43%
- Adjusted net debt of $917m at 31 March 2022; Adjusted net debt to Adjusted EBITDA ratio of 0.51 times
- Cash flow from operating activities increased more than three-fold year-on-year from $149m in Q1 2021 to $533m in Q1 2022
- Free cash flow increased from an outflow of $92m in Q1 2021 to an inflow of $268m in Q1 2022