JOHANNESBURG - AngloGold Ashanti reported first quarter headline earnings of $203m, driven by the higher gold price, as the Company continued its reinvestment programme aimed at completing the redevelopment of the Obuasi gold mine and adding new gold reserves across its portfolio.
Headline earnings of $203m, or 48 cents a share in the three months to the end of March 2021, compare to $143m, or 34 US cents per share, in the first quarter of 2020. Adjusted net debt declined by 43% year-on-year to $908m in the first quarter of 2021 from $1,606m in the first quarter of 2020.
'We continue to make progress in delivering on our strategy,' Interim Chief Executive Officer Christine Ramon said. 'Our balance sheet remains in a solid position and Obuasi is making steady progress to completion.'
This year and next will be key investment years for AngloGold Ashanti as it increases production from brownfields projects and builds on strong reserve additions from exploration in 2020, to increase its overall reserve base and the life of its mines. The Company currently expects to meet its guidance for 2021.
Construction at the Obuasi Redevelopment Project, which will transform the 20Moz high-grade gold ore body, initially placed on care and maintenance in 2016, into a top-tier gold producer, achieved 97% completion by the end of March this year. Production from the mine rose 53% to 46,000oz in the first quarter of 2021, from 30,000oz the prior quarter.
Production for the first quarter of 2021 was 588,000oz at a total cash cost of $999/oz, compared with 630,000oz at a total cash cost of $773/oz from continuing operations in the same period in 2020. Solid production performances at AGA Mineracao, Serra Grande, Siguiri and Obuasi were offset by declines at other mines in the portfolio.
In the first quarter of 2021, COVID-19 accounted for an estimated 4,000oz of lost production and an estimated $29/oz of all-in sustaining costs. The Brazilian operations and Obuasi mine were most affected by the pandemic during the first quarter, with high rates of absenteeism affecting productivity in Brazil and ongoing challenges encountered in the rotation of expatriate workers from Australia to Ghana.
In the first quarter of 2021, total cash costs increased mainly as a result of lower grades and the drawing down on ore stockpiles at some of the operations while waste stripping and underground development progressed, as well as inflationary pressures recorded across most of the portfolio. This increase was partly offset by operating efficiencies. AISC rose by 26%, or $266/oz, to $1,287/oz in the first quarter of 2021, compared to $1,021/oz from continuing operations in the first quarter of 2020.
The primary driver of production growth over the next two years are Obuasi operating at steady state, Tropicana reverting to normalised production levels following the current reinvestment in its life extension, and planned production gains from AGA Mineracao, Siguiri and Sunrise Dam.
Adjusted EBITDA increased by 3% year-on-year from $434m in the first quarter of 2020 to $449m in the first quarter of 2021, giving a strong Adjusted EBITDA margin of 47% in the first quarter of the year. The Adjusted net debt to Adjusted EBITDA ratio improved from 0.93 times at 31 March 2020 to 0.37 times at 31 March 2021.
The Company is steadily progressing its new climate strategy, including the implementation of the recommendations of the Task Force on Climate- Related Financial Disclosures which was created by the Financial Stability Board. This process is currently expected to be completed later this year, along with new emission reduction targets and strategies to further reduce emissions and its carbon footprint.
Contact:
Julie Bain
Tel: +27 663 640 038
Email: jbain@anglogoldashanti.com
Certain statements contained in this document, other than statements of historical fact, including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-in sustaining costs, all-in costs, cost savings and other operating results, return on equity, productivity improvements, growth prospects and outlook of AngloGold Ashanti's operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of AngloGold Ashanti's exploration and production projects and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti's liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti's operations, economic performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause AngloGold Ashanti's actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic, social and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of pending or future litigation proceedings, any supply chain disruptions, any public health crises, pandemics or epidemics (including the COVID-19 pandemic), and other business and operational risks and other factors. For a discussion of such risk factors, refer to AngloGold Ashanti's annual report on Form 20-F for the year ended 31 December 2020, filed with the United States Securities and Exchange Commission (SEC). These factors are not necessarily all of the important factors that could cause AngloGold Ashanti's actual results to differ materially from those expressed in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are cautioned not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except to the extent required by applicable law. All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti or any person acting on its behalf are qualified by the cautionary statements herein. The information contained in this announcement has not been reviewed or reported on by AngloGold Ashanti's external auditors.
ANGLOGOLD ASHANTI LIMITED 
