AngloGold Ashanti has reaffirmed its full-year guidance after its core earnings for first nine months of its financial year more than doubled to $1.863bn.
The gold miner reported free cash flow for the first nine months at $553m, compared with a $184m outflow in last year's matching period. Gold production was relatively unchanged at 1.9-million ounces.
The earnings boost comes on strong third-quarter financial performance, with AngloGold posting a sharp rise in free cash flow and earnings in September quarter.
Adjusted ebitda (earnings before interest, tax, depreciation and amortisation) for the quarter came it at $746m, reflecting a more than threefold increase from the previous matching period — on top of a 17-fold year-on-year rise in free cash flow, which was recorded at $347m.
AngloGold said solid cost control and active management of working capital helped ensure that higher revenues were reflected in stronger earnings and cash flows, with total cash costs per ounce up only 2% since the beginning of the year.
This allowed the group to take advantage of the favourable gold price environment, with the average gold price received in the third quarter being 25% higher than in the third quarter of last year.
“Tight control of costs and active management of our working capital means that the higher gold price has flowed through to our bottom line,” said AngloGold CEO Alberto Calderon.
“We’re looking for additional improvements to production and margins to ensure we deliver an even stronger fourth quarter and continue to capitalise on this healthy gold price environment.”
Despite achieving its strongest quarterly gold output in the period, gold production was still down year on year at 657,000oz, owing to lower grades and a decline in production at the Kibali joint venture. However, this was somewhat offset by resilient performances from several key operations, with output increasing year on year across its Obuasi, Siguiri, Tropicana, Cerro Vanguardia and Sunrise Dam mines.
“The Australian portfolio recovered well from rains and flooding in the first quarter, while the operational turnaround of the Brazilian operations continued to gain momentum with the resumption of processing gold concentrate at the Queiroz plant during September,” said the company.
The strong third quarter performance leaves AngloGold in a good standing for the remainder of the year, with the group reaffirming its full-year 2024 guidance on all metrics.
In September, the group announced its acquisition of Centamin, bolstering its portfolio with an established Tier One asset, the Sukari mine in Egypt. Last year, the mine produced 450,000oz of gold at an all-in-sustaining cost (AISC) of $1,196/oz, well below AngloGold’s current average.
AngloGold said the addition of Sukari would result in a greater share of the group’s gold output coming from tier onne assets, opening doors for the company to consider ways to dispose of its higher-cost tier two mines.
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