AngloGold reports loss on mine closures

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GoldBarplusbeads Reuters. Gold bars and granules.

Johannesburg - AngloGold Ashanti, the world’s third-largest producer of the precious metal, swung to a second-quarter loss due to closing costs related to mines in Ghana and Mali.

AngloGold’s adjusted headline loss was $4 million (R43 million) in the three months ended June 30, compared with a profit of $119 million in the previous quarter, the Johannesburg-based company said today in a statement.

Production rose 4 percent to 1.1 million ounces, beating the company’s forecast of 1.02 million to 1.06 million ounces, and all-in costs climbed 7 percent to $1,114 an ounce.

AngloGold has reduced capital and exploration spending as it seeks to cut costs in response to a gold price that’s 22 percent lower since the beginning of 2013.

The company said its earnings were eroded by costs from closing its Yatela mine in Mali and reorganising operations in Ghana.

“We’re on track to meet our targeted savings in operating and overhead costs –- all while delivering production growth and a record safety result,” chief executive Srinivasan Venkatakrishnan said in the statement.

AngloGold last month said it would write down by $51 million its investment in South Africa’s Rand Refinery, which has processed about a third of the world’s gold since 1920, after an accounting error at facility led to a deficit of 87,000 ounces of bullion.

AngloGold owns a 42 percent stake in Rand Refinery.

The company forecasts production of 1.06 million ounces to 1.09 million ounces for the third quarter at total cash costs of $850 to $890 per ounce. - Bloomberg News



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