AngloGold sees first increase in production in a decade

AngloGold Ashanti’s results for 2013 saw the miner improve costs and production for the first time in nearly a decade.

According to the miner this was due to successfully cutting spending and commissioning two new mines.

Production for 2013 was 4.105 million ounces of gold, exceeding guidance set, which is a massive jump over its 2012 output of 3.95 million ounces in 2012.

It was also the first production increase for AngloGold since 2005.

The miner has also forecast further growth for 2014.

For the year AngloGold managed to bring in more efficient practices which saw production costs from $1251 per ounce down to $1174 per ounce year on year.

As the year progressed it managed to cut this even further down to $1015 per ounce for the fourth quarter.

It was aided by the commissioning of both the Tropicana and Kibali mines, which were commissioned ahead of time and on budget in September.

“Thanks to our investments made in prior years, we are starting to reverse nearly a decade of shrinking production,” AngloGold’s CEO Srinivasan Venkatakrishnan (Venkat) said.

“This gives us the flexibili9ty to remove marginal production without compromising our base, which sets us apart in a sector that continues to shrink.”

In a similar vein to BHP and Rio Tinto, the miner has slash corporate costs and cut exploration budgets.

“We continue to refocus the entire business to give us a sustainable free cash flow,” Venkat said.

The miner’s EBITDA rose to $544 million in the three months to 31 December, a 66% increase on the previous quarter.

Production also rose, by 18% to 12229 million ounces, compared to the third quarter.

It also slashed costs quarter on quarter as part of AngloGold’s Project 500 initiative, which is aimed at creating $500 million in operating costs savings between mid-2013 and the end of 2014.

“We’re ahead of plan on our costs savings,” AngloGold’s international COO Ron Largent said, adding that “we’re intensifying our drive to achieve additional efficiencies this year.”

Safety was up and fatalities were down across its sites, “reaching the best levels in the company’s history,” it said, adding that “eight fatalities were recorded during the year, compared with 18 in 2012”.


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