AngloGold results reflect 'difficult' year

South African gold producer AngloGold Ashanti Ltd on Wednesday announced annual results reflecting a "difficult year" that included a month-long unprotected strike in South Africa, which shut all of the company's mines.

Its international assets, however, performed strongly.

AngloGold swung to a fourth-quarter net loss.

"We've moved decisively to ensure that we continue a strong recovery from a difficult end to last year," Joint Interim CEO Tony O'Neill, who shares the role with Srinivasan Venkatakrishnan, said in a statement.

The South Africa-based miner said fourth-quarter adjusted headline earnings were 2 US cents compared with 61 US cents in the previous quarter.

Production dropped to 859,000 ounces in the quarter.

Full-year production was 3.9 million ounces, off from the company's target of between 4.3 and 4.4 million ounces.

Geita, in Tanzania, was the group's largest production contributor, improving annual production by seven percent to 531,000oz at a total cash cost of $660/oz.

AngloGold said it continues seek to "improve the quality and diversity of its portfolio".

"The main greenfield projects at Tropicana, in Australia, and the Kibali joint venture, in the Democratic Republic of Congo, remain on track to produce gold within a year," it said in a statement. "The expansion of Cripple Creek & Victor, in the US, also remains on track."

Production in 2013 is anticipated to grow to between 4.1Moz and 4.4Moz at an improved total cash cost of $815/oz to $845/oz.

"More focused investment in the business has helped AngloGold Ashanti forecast stable capital expenditure of about $2.1 billion for 2013, while corporate costs are expected to decline by about 18 percent to $240 million," the company said.

"Our focus is on improving margins and delivering returns, rather than production growth, and that will continue to drive our decision making," Venkatakrishnan explained. "We have good projects and a solid financial base."

During October, AngloGold took a decision to terminate its underground development contract with Mining and Building Contractors Limited at its Obuasi mine in Ghana in an effort to improve production and costs.

Chief executive Mark Cutifani said all of the South African mines were now at pre-strike levels.

"AngloGold Ashanti continues to deliver the best returns on capital amongst the gold majors, which reflects strict discipline in capital deployment over the past five years," he said. "That's been core to our strategy since early 2008, when we outlined our vision for the company."

Cutifani is stepping down to join Anglo American as its CEO in April.

Image: Getty

Copyright is owned by Africa Outlook and/or Outlook Publishing. All rights reserved.