JOHANNESBURG - Anglogold Ashanti yesterday announced that it would likely report bumper earnings for the year to December 2019, boosted by the gold price rally coupled with weaker local currencies.
In a trading statement, the group said that the strong gold price had helped it shrug off the lower output, higher costs mainly due to inflation and lower grades and the payment of higher royalties and taxes.
It said income from the Kibali mine in the Democratic Republic of Congo and other equity investments had jumped by $46million (R684.39m) or 11cents a share.
The group, which yesterday confirmed the sale of its Mponeng Mine to Harmony Gold Mining, said it expected headline earnings of up to $401m, with headline earnings per share jumping by up to 96c.
Headline earnings and headline earnings a share a year earlier were $220m and 53c, respectively.
However, it flagged that it would report a total basic loss of up to $26m, resulting in a total basic loss a share of as low as zero.
Basic earnings and basic earnings per share for the comparative period were $133m and 32c, respectively.
The total basic loss was as a result of a non-cash impairment charge of $385m or 92c per share related to the sale of the South African operations.
The bullion producer said the basic loss included the non-cash impairment of the uranium plant relating to Mine Waste Solutions of $66m or 16c a share.
Retrenchment costs related to the restructured South African operations was $25m or 6c a share, it said.
Seleho Tsatsi, an investment analyst at Anchor Capital, said that the company's projected headline earnings had fallen below market expectations.
“AngloGold’s projected headline earning per share of between 86c and 96c is 8percent shorter than the market expectation of at least 99c per share,” said Tsatsi.
AngloGold Ashanti confirmed yesterday that it had picked Harmony to take over its South African mines.
Tsatsi said AngloGold’s exit from South Africa was against the backdrop of a difficult operating environment.
“Gold mining in South Africa is a tough business that will likely get even more challenging,” Tsatsi said.
AngloGold last year sold its 41percent stake in the Sadiola gold mine in Mali for $52.5m
AngloGold Ashanti shares closed 0.75 percent lower at R283.87 on the JSE yesterday.