JOHANNESBURG (Reuters) – AngloGold Ashanti shares went up 2% on Friday after CEO Alberto Calderon promised to cut costs that hurt earnings in the first half of the year and moved the company closer to the high end of its full-year forecast range.
The South African gold miner produced 1.233 million ounces in the first half of the year, which is 3% more than the same time last year. This puts the company on track to meet its 2022 output goal of between 2.55 and 2.8 million ounces.
But South Africa’s main profit measure, headline earnings per share, came in at 71 U.S. cents, which is 18 percent less than a year ago. As inflation got worse, total cash costs went up by 6% to $1,068 an ounce, but Calderon said he was glad the rise was “limited.”
The CEO told reporters, “We’re happy with what we were able to do.” He also said that most of the company’s competitors have had “serious problems” with costs.
Calderon said the miner can cut cash costs enough in the second half to stay within the company’s cash cost guidance for the year, which is $925 to $1015 per ounce.
Last week, Newmont Corp, the largest gold miner in the world, raised its forecast for annual costs and said that inflationary pressures would continue into next year. This resulted in a 12% drop in its stock price.
AngloGold Ashanti mines for gold in Argentina, Australia, Brazil, the Democratic Republic of the Congo, Ghana, Guinea, and Tanzania. In the first half of the year, the company made 1.233 million ounces of gold. The second quarter’s output was 10 percent higher than the first quarter’s because the grades were higher.
Adjusted net debt was $740 million, down 13% year on year, and free cash flow was $471 million, up from a loss of $25 million in the first half of last year. This was helped by cash distributions from its Kibali mine in Congo, which is a joint venture run by Barrick Gold (NYSE:GOLD) Corp.
