AngloGold Ashanti has reported a total profit after tax and other interests to the tune of $298 million in the first six months of the year, tracking below profits made over the same period last year ($362 million).

The mining major attributed the fall in profits to the increasing cost environment, despite favorable demand of the yellow metal amid the trajectory of higher inflationary pressures globally. AngloGold Ashanti reported an interim dividend of 29 US cents per share, or $121 million, to shareholders.

Regarding costs, the gold miner recorded $1,068 per ounce as total cash costs for the first six months of 2022, indicating a rise in cost by 6 per cent compared to that of the first half of 2021.

According to AngloGold Ashanti, this was driven largely by accelerating inflation across several input categories as well as larger royalty payments due to the higher gold price received.

Likewise, all-in sustaining costs (AISC) increased by 6 per cent year-on-year to $1,418/oz in H1 2022 mainly due to planned higher sustaining capital expenditure increased total cash cost. These cost pressures were partially offset by operating improvements and a 10 per cent increase in underground grades.

Chief Executive Officer, Alberto Calderon said:

“The fundamentals of our company continue to improve, despite the challenging cost environment. We have the right structure and the right people in place to further optimise from our portfolio and close the gap with our peers.”
Alberto Calderon

Earnings See a Drop

Adjusted Earnings before Interests, Taxes , Depreciation and Amortization (EBITDA) for the first half of 2022 was $864 million, compared with $876 million for the first half of 2021.

Headline earnings for the first half of 2022 were $300 million, or 71 US cents per share, compared with $363 million, or 87 US cents per share, in the first half of 2021.

Free cash flow increased to $471 million for the first half of 2022 from an outflow of $25 million in the same period last year and the balance sheet remains flexible during an ongoing period of reinvestment in improving its portfolio.

Operational results indicated an overall “solid performance” for the first-half of 2022, with production up by 3 per cent year-on-year, an increase in total cash costs by 6 per cent and a strong improvement in cash flow.

In addition, production for the first six months of 2022 was 1.233 million ounces, with second quarter output up 10 per cent compared with first quarter output.

The Strong output performance was underpinned by higher grades and tonnes processed, leading to marked improvements from the Australian and Latin American operations, which offset lower production from Kibali and Geita.

Operational activities at Obuasi continued its ramp-up through the period and is on track to achieve its annual production guidance of 240,000 ounces to 260,000 ounces for 2022.

The increase in free cash flow was supported by $549 million received from the Kibali gold mine in the Democratic Republic of the Congo. The $365 million cash acquisition of Corvus Gold Inc. was completed in January 2022, creating a strong foothold in the prospective Beatty district in Southern Nevada which the company plans to bring into production in about three years.

The company’s balance sheet remained in a solid position after funding the Corvus acquisition and paying the 2021 year-end dividend, with approximately $2.6 billion in liquidity, including cash of $1.3 billion at the end of June 2022.