Make Kitco Your Homepage

AngloGold Ashanti posts 17% gold production drop in Q3, focuses on cutting costs

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, one of the largest gold producers worldwide, today reported that its Q3 2021 production of 613,000oz was down 17% year-on-year, excluding Obuasi, which resumed underground mining activities in mid-October 2021.

According to the company’s statement, its year-on-year performance, which saw costs rise and production decline from the third quarter of 2020, was impacted by the voluntary suspension of underground mining activities at Obuasi in May, lower grades at certain operations, inflationary effects, and the ongoing impacts of COVID-19.

Total cash costs for the third quarter of 2021 were $927/oz compared with $755/oz in the third quarter of 2020, whereas all-in sustaining costs (AISC) for the third quarter of 2021 were $1,362/oz compared with $1,006/oz in the third quarter of 2020, mainly due to a 27% increase in sustaining capital expenditure and higher cash costs.

AISC in the third quarter of 2021 included an estimated $20/oz impact due to COVID-19 and an estimated $94/oz impact relating to the Brazilian tailings compliance programme, the company added.

Importantly, the company said that its adjusted net debt in Q3 2021 was $871 million compared with $878 million in Q3 2020.

Newly appointed CEO Alberto Calderon has prioritized reductions in all costs, improvements in operating and capital efficiencies and the implementation of a new operating model to ensure accountability and operational consistency and to enhance the company’s positioning through the cycle.

“We must put in place the right foundation for long-term success, and the most crucial part of that is an operating model which prioritises efficiency, agility and accountability,” Calderon said. “My immediate aim is to ensure that we have the right people, in the right places, making the right decisions, to provide better outcomes.”

The company added that its guidance, which was revised earlier this year, remains on track with production at 2.45Moz to 2.60Moz, tracking at the bottom end of the range; total cash cost of $890/oz to $950/oz and AISC of $1,240/oz to $1,340/oz, both tracking at the top end of the range.

The revised guidance does not include any production contribution from Obuasi for the second half of 2021 as underground ore will only be used to replenish the run-of-mine stockpile after restarting underground ore mining in mid-October 2021.

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.