AngloGold Ashanti, the largest gold company on the JSE, has reported a "solid second quarter operational performance" with production of 935,000oz at a total cash cost of between $900/oz and $920/oz.
The firm said it was "in line with market guidance" of 900,000oz to 950,000oz at a total cash cost of $900/oz to $950/oz.
"It's been a strong performance in a challenging environment from our operators and from the teams developing our two new, high-quality projects," AngloGold Ashanti's CEO Srinivasan Venkatakrishnan. "In light of the $220/oz drop in the average quarterly gold price which will negatively impact our second quarter results, we've moved decisively on all fronts to sharpen our focus on efficiency and to tighten up on costs, overheads and capital."
AngloGold Ashanti is the world's third-largest gold producer with 21 operations in 10 countries and a portfolio of exploration assets. In addition to its existing portfolio, two new mines – Tropicana Joint Venture in Australia and the Kibali Joint Venture in the Democratic Republic of Congo – are in development and are scheduled to start production before the end of this year. Together, these two projects are expected to add in 2014 attributable production of approximately 550,000oz to 600,000ozs at a combined average total cash cost of "less than" its current average.
It added that Randgold Resources Limited operation may produce gold as early as October of this year and that it is also seeking aggressive savings in both operating and indirect costs, as well as sustaining capital expenditure over the next 18 months.
The low gold price has led to a tightening of the belt and AngloGold Ashanti said "capital expenditure is being focused on the group's highest quality assets, while curtailing spending or suspending operations at projects that may yield lower returns. In addition, we may seek partners for certain of our projects. Exploration spending is being reduced through a more tightly focused global drilling programme and overhead costs are being significantly rationalised."
The gold price has retreated about 24 percent so far this year.
Details of progress made on its cost saving and efficiency improvement programmes will be provided along with second-quarter financial results next month.
Image: © AngloGold Ashanti
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