Johannesburg - AngloGold Ashanti has withheld full-year dividend payments to shareholders despite raising production and cutting costs in line with its promise.
“It was a difficult call for the board to make. The debate did last long as the prospects are looking promising as we go into 2014. However, the gold price was volatile,” chief executive Srinivasan Venkatakrishnan said at a results presentation yesterday. “We had to ask if it is good financing strategy to borrow money from the banks and pay dividends.”
The production increase was a reflection of the recovery from the violent strike that halted operations in the local mining sector in August 2012.
Output in the 12 months to December last year increased by 4 percent to 4.105 million ounces from a year earlier, the first increase in nine years and slightly above the top end of its guidance range. All-in sustaining costs for the year declined to $1 174 (R12 832) an ounce from $1 251 the previous year.
By the fourth quarter, all-in sustaining costs had fallen sharply to $1 015 an ounce as production grew 18 percent on the year to 1.23 million ounces.
A highlight in the year under review was the progress in its technology project, which was expected to mine 1 million ounces in the next three years.
At Obuasi mine in Ghana, the biggest issue was how to get to the ore body, and the focus would be on how to modernise and mechanise the mine, and reskill the labour force. “The biggest focus would be on costs, we are getting good feedback from union and government,” Venkatakrishnan said.
Kibali mine in the Democratic Republic of Congo and Tropicana mine in Western Australia came on steam ahead of schedule and on budget. The sale of Navachab mine in Namibia for $110 million has been agreed.
Venkatakrishnan was confident about the group’s black economic empowerment credentials and said the firm was compliant with requirements of the Department of Mineral Resources.
“We have had open discussions with the department and the Chamber of Mines.”
Adjusted headline earnings were $599m, or R1.53 a share, last year compared with $988m, or R2.55 a share, in 2012 after the gold price dropped by almost 16 percent last year.
Fourth-quarter adjusted headline earnings rose 49 percent to $164m.
The shares rose 1.19 percent to close at R192.19 yesterday. - Business Report