Make Kitco Your Homepage

AngloGold Ashanti ups dividend fivefold, production falls 7%

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - AngloGold Ashanti (JSE: ANG; NYSE: AU) today reported a fivefold increase in its full-year dividend payment and added 6 million ounces of new ore reserve, on a gross basis.

According to the company’s statement, basic earnings for the period ended 31 December 2020 were $953m, or 227 US cents per share, compared with a $12m loss, or 3 US cents loss per share in 2019.

Headline earnings for the period ended 31 December 2020 were $1,000m, or 238 US cents per share, compared with $379m, or 91 US cents per share in 2019. Earnings benefitted from the higher gold price net of increased profit-related taxes. Free cash flow before growth capital - the metric on which dividends are calculated - increased by 124% to $1,003m in 2020 versus $448m in the prior year.

The company's Board declared a full-year dividend of 705 ZAR cents per share (approximately 48 US cents per share), compared to a dividend of ZAR 165 cents per share (9 US cents per share) in 2019.

Strong financial results were achieved despite a decline in gold output. The company said that gold production was 3.047Moz at a total cash cost of $819/oz in the twelve months to 31 December 2020, from 3.281Moz at a total cash cost of $776/oz in 2019. The 7% reduction in production was due mainly to the sale of the company’s remaining South African producing assets, the cessation of mining activities at Sadiola and Morila in Mali, and the impact of the COVID-19 pandemic.

The company added 6 million ounces of gold in reserves - more than replacing depletion from mining and extending the overall reserve life of the company's portfolio. These additions included 1.4 million new ounces of ore reserve at the Geita gold mine in Tanzania, and 1.8 million ounces at Obuasi, in Ghana.

"After several years of rationalising our portfolio, we have a clear and credible path to disciplined, high-return growth," said interim CEO Christine Ramon. "We've built a solid balance sheet, which allows us to continue self-funding our capital investment, while rewarding shareholders," added Ramon.

AngloGold Ashanti aims to grow annual production from last year's 3.05 million ounces to between 3.2 million ounces and 3.6 million ounces by 2025.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.