AngloGold Ashanti bounced back stronger in Q1 2022, with production steady on a year-on-year basis, coming in at an all-in sustaining cost (AISC) of $1,045 per ounce of gold, representing a 9 per cent rise year-on-year.

Gold output at end-Q1 2022 was 588,000 ounces of gold, unchanged from that of the previous year’s quarter, with strong contributions from Sunrise Dam, Cerro Vanguardia, and Tropicana— which all pertain to AngloGold’s Australian operations. These improvements offset lower production from Kibali, Geita and also Obuasi, which resumed its underground production ramp up in January 2022.

More broadly, total cash costs at end-Q2 2022 was $1,041 per ounce of gold, up 4 per cent year-on-year. The company’s report showed that this was driven largely by factors including rising inflation across several categories of input costs and higher royalties— due to the higher gold prices received. Despite the rise, inflationary pressure was partly offset by operating improvements and an 8 per cent increase in underground grades.

The company’s free cash flow increased to $268 million from an outflow of $92 million in the first quarter of 2021, ensuring the balance sheet remains flexible during an ongoing period of reinvestment in improving its portfolio. The increase in free cash flow was aided by $326 million received from the Kibali gold mine in the Democratic Republic of Congo.

AngloGold’s Financials Picking up

The company’s financials as at the end-Q2 2022, realized an adjusted EBITDA of $438 million, reflecting a decrease of 2 per cent year-on-year in Q1 2022 and adjusted EBITDA margin of 43 per cent. Adjusted net debt was $917 million at March 31, 2022.

Chief Executive Officer Alberto Calderon, said:

“We’re starting to achieve our main catalysts. There’s still a long way to go, but we’re starting to see an improving operational performance across the portfolio, underpinned by a more focused operating culture and a better grade profile.”
Alberto Calderon

The report stated that the company is embedding a new Operating Model after completing the implementation of an organisation-wide restructuring. The Company has introduced new leadership and removed duplicate roles and unnecessary expenditure to reduce costs and improve operating results. A programme of increased investment is underway to improve mining flexibility and extend the lives of its key assets.

The Company commenced its Full Asset Potential Review process at the Sunrise Dam mine in Australia and Siguiri mine in Guinea, the first step in achieving a step-change improvement in operating performance and competitiveness, with an additional four sites to undergo the process over the remainder of 2022.

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 it plans to bring into production in about three years,” the company reported.

The company’s balance sheet remained in a solid position after funding the Corvus acquisition and paying the 2021 year-end dividend, with approximately $2.5 billion in liquidity, including cash of $1.0 billion at the end of March 2022.