London, Denver, Johannesburg, 6 August 2024 – AngloGold Ashanti plc (AGA) reported improvements in gold production and total cash costs per ounce for the first six months of the year compared with the first six months of last year, helped by a significant turnaround at its Brazil operations, which in turn drove significant year-on-year gains in cash flow and earnings.
With further operating improvements expected in the second half of 2024, guidance for 2024 was maintained. In the first half of 2024, gold production rose 2% year-on-year to 1.25Moz from 1.23Moz in the same period a year earlier, with total cash costs per ounce for the group decreasing 1% year-on-year to $1,158/oz from $1,169/oz in the same period last year.
This is compared to a realised inflation rate for the Company of about 6% during the first half of 2024, which represents the sum of price-related increases in the cost of goods and services at each site.
All-in-sustaining costs (AISC) per ounce for the group rose 2% year-on-year in the first six months of 2024 to $1,589/oz compared with $1,555/oz in the same period in 2023.
Total cash costs per ounce for subsidiaries improved 1% year-on-year from $1,209/oz in the first half of 2023 to $1,200/oz in the first half of 2024. Total cash costs per ounce* for joint ventures improved 2% year-on-year from $880/oz in the first half of 2023 to $866/oz in the first half of 2024.
AISC per ounce* for subsidiaries increased 2% year-on-year from $1,624/oz in the first half of 2023 to $1,658/oz in the first half of 2024. AISC per ounce* for joint ventures increased 2% year-on-year from $1,060/oz in the first half of 2023 to $1,078/oz in the first half of 2024.
Improved operational performance and strong cost control helped AngloGold Ashanti capture the benefit of a higher average gold price received per ounce, with Adjusted earnings before interest, tax, depreciation, and amortisation (Adjusted EBITDA) rising 65% year-on-year in the first half of 2024 to $1.118bn from $676m in the first half of 2023.
Free cash flow for the first half of 2024 was an inflow of $206m compared to an outflow of $205m in the same period in the previous year. “These results show the hard work that’s been done to improve the fundamentals of our business, to drive productivity benefits and manage costs to ensure we capture the benefit of stronger gold prices,” CEO Alberto Calderon said.
“We expect to deliver an even stronger second-half performance.” Denver-headquartered AngloGold Ashanti continues to take steps to improve its valuation versus its North American peers by further improving relative cost performance and cash conversion while increasing the life of its key mines and prioritising the successful development of major projects.
Brazil Drove LATAM Turnaround
Gold production in the first half of 2024 from the Company’s Americas segment — AngloGold Ashanti Mineração (Cuiabá), Serra Grande and Cerro Vanguardia — increased 10% year-on-year to 257,000oz from 234,000oz in the first half of 2023. Total cash costs per ounce from the business unit improved 18% year-on-year to $974/oz in the first half of 2024 from $1,185/oz in the same period last year.
AISC per ounce in the region improved 27% to $1,414/oz in the first half of 2024 from $1,932/oz in the same period last year. The region recorded a strong turnaround in free cash flow for the first six months of 2024, recording an inflow of $149m from an outflow of $127m in the same period last year.
“We took decisive steps last year to restructure our business in Brazil after a sustained period of losses,” Calderon said. “That created the foundation for this step-change in operating performance, which we will look to improve further.”
Proactive Cost Management Offsetting Inflation
The 1% year-on-year improvement in total cash costs per ounce for the group during the first half of 2024 as compared to the first half of 2023 was mainly characterised by improved operational performance and enhanced cost efficiency linked to the Full Asset Potential initiatives.
The 2% year-on-year increase in AISC per ounce for the group during the first half of 2024 as compared to the first half of 2023 was mainly due to a planned increase in sustaining capital expenditure.
Strong Second Quarter Bolsters First Half Performance
Gold production in the second quarter of 2024 rose 12% quarter-on-quarter to 663,000oz from 591,000oz in the first quarter of 2024. The overall second-quarter improvement in gold production quarter-on-quarter came as the Australian assets recovered from flooding toward the end of the first quarter of 2024.
Tropicana’s second-quarter gold production improved quarter-on-quarter by 38%, and Sunrise Dam’s by 14%. At Siguiri, where metallurgical recovery challenges hampered first-quarter performance, second-quarter gold production was up 67% quarter-on-quarter.
Across the remainder of the portfolio, improved second-quarter gold production contributions were recorded at Kibali (8%), Iduapriem (6%), Cerro Vanguardia (5%) and Geita (1%).
At Ghana’s Obuasi, gold production was steady quarter-on-quarter at 54,000oz in the second quarter of 2024. Underground ore tonnes treated increased by 7% quarter-on-quarter as the mine ramped up open-stope volumes.
Strong Financial Performance and Dividend Increase Driven by Improved Fundamentals and the Higher Price of Gold
Basic earnings in the first half of 2024 were higher than in the first half of 2023 mainly due to more gold sold, a higher average gold price received per ounce, lower operating costs, lower impairments and derecognitions of assets, higher equity earnings from joint ventures, higher finance income and lower foreign exchange losses, partly offset by higher losses on non-hedge derivatives, higher corporate and operating expenses, and higher taxation.
Basic earnings were $311m, or 74 US cents per share, in the first half of 2024 compared to a basic loss of $39m, or 9 US cents per share, in the same period a year earlier.
Headline earnings were $313m, or 74 US cents per share, in the first half of 2024 compared to $61m, or 14 US cents per share, in the same period a year earlier. The Company generated $206m in free cash flow in the first six months of 2024 compared to an outflow of $205m in the same period last year.
This increase was mainly due to the turnaround in the Americas, a higher average gold price received per ounce and loan repayments from Kibali, partially offset by higher capital expenditure and higher cash taxes.
The balance sheet remained robust notwithstanding continued investment in the existing production base and the project pipeline, as well as the payout of the final 2023 dividend in March 2024.
The Company had liquidity of approximately $2.3bn at the end of June 2024, including cash and cash equivalents of approximately $983m. Following the improved first-half performance to production, cash costs and free cash flow, coupled with the robust balance sheet and expectations for continued improvements in the second half of the year, an interim dividend of 22 cents a share was declared, versus 4 cents in the first half of 2023.
Geita Fatality
Tragically, a fatal light vehicle accident was recorded in May 2024 at Geita, in Tanzania, where a contractor was killed when the light motor vehicle, he was driving overturned.
An in-depth investigation into the incident has been completed and a clear series of steps were identified to avoid future such accidents. Our thoughts are with the family and loved ones of our deceased colleague, as well as his colleagues.