AngloGold full year results reveal reduction in gold production

Shares in global gold producer AngloGold Ashanti fell slightly on Wednesday after the company published results showing a reduction in gold production for the year ending December 2012.

Shares in global gold producer AngloGold Ashanti fell slightly on Wednesday after the company published results showing a reduction in gold production for the year ending December 2012.

The volume of gold produced in the full year was 3.99m ounces compared to 4.33m ounces in the preceding year.

However, the price received for each ounce of gold rose to $1,664 compared to $1,574 per ounce in 2011.

Geographical BreakdownA geographical breakdown of the countries where AngloGold produces gold showed that the company's operations in Continental Africa generated the highest proportion of the yellow metal - representing almost half of all gold production with 43.8%, while operations in Australasia produced the smallest proportion of overall gold production, representing 6.4%.

A total of 376,000 ounces of gold was produced in Continental Africa, 10% less than the volume generated in the preceding year.

Some 171,000 ounces was produced in South Africa, 57% less than the volume produced in the prededing year.

55,000 ounces was generated in Australasia, 13% lower than in the preceding year and 258,000 ounces were produced in the Americas, 10% more than in the previous year.

The company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.4bn, down from $3.01bn in the previous year.

A full year dividend of 300 South African Cents per share was recorded while a quarterly dividend of 50 South african cents per share was given.

Decisive action takenTony O'Neill, Joint Interim Executive Officer, commented: "We've moved decisively to ensure that we continue a strong recovery from a difficult end to last year."

Srinivasan Venkatakrishnan, Joint Interim Chief Executive Officer, said: "We're creating a leaner business and placing an absolute focus on costs, capital efficiency and driving returns to shareholders".

He added: "We have also been proactive and obtained a term facility to backstop, if required the convertible bond maturing in May 2014 to remove refinancing risk."

Gold production in 2013 is estimated at between 4.1m ounces and 4.4m ounces, the company said

Analysts' comments: Investec viewThe Investec Global Natural Resources Research Team described the results as: "A reasonable result, given the strike issues in the fourth quarter. Like most companies in the sector now, AGD[Anglogold Ashanti] intends focusing on margins and returns, rather than production growth.

"Outgoing Chief Executive Officer, Mark Cutifani, states AGD delivers the best returns on capital amongst the gold majors."

Angold Ashanti' share price was down 4% to 1,800p at 08:09 on Wednesday.

MF

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Bitcoin: fool’s gold or the new gold?
Bitcoin

Bitcoin: fool’s gold or the new gold?

With bitcoin hitting new highs last week, and close to becoming a mainstream investment, is it really gold for the 21st century?
15 Jan 2021
The MoneyWeek Podcast: bitcoin special
Bitcoin

The MoneyWeek Podcast: bitcoin special

Merryn talks to bitcoin experts Dominic Frisby and Charlie Morris to get the lowdown on the cryptocurrency to find out why it's such a huge global phe…
15 Jan 2021
Leasehold reforms promise the end of a nightmare for many homeowners
Property

Leasehold reforms promise the end of a nightmare for many homeowners

Horror stories about unscrupulous landlords profiting from a legal relic of the feudal era are about to get a happy ending, says Simon Wilson.
16 Jan 2021
Free 6 issue trial then continue to