AngloGold Ashanti Reports Full-Year Loss -- Update
By Alexandra Wexler
JOHANNESBURG--AngloGold Ashanti Ltd. (ANG.JO) reported a full-year loss on Tuesday as the company wraps up a restructuring of its South African operations.
The world's No. 3 gold producer reported a loss of $191 million in the year to Dec. 31 from a profit of $63 million during 2016, in line with the company's previously announced guidance. AngloGold, which operates 17 mines in nine countries, said in June that it would review its South African mining operations given their under-performance and heavy losses.
Earnings for the year were hit by a $110 million post-tax impairment charge related to certain South African mines, as well as $71 million set aside for staff layoff costs as well as $46 million for the estimated cost of settling a silicosis class-action lawsuit brought against a group of major South African miners.
Still, the South Africa-based mining company declared a dividend of ZAR70 cents per share and said it had decided to redevelop its Obuasi mine in Ghana to the tune of more than $600 million, thanks to good government support for the project. "The redevelopment will establish Obuasi as a long-life, modern, mechanized underground mining operation, which is a fundamental departure from the previous operating method used at the mine," the company said.
The move away from South Africa marks a historical shift for a company founded through the consolidation of the gold mining interests of Anglo American, which in turn was founded by mining magnate Ernest Oppenheimer in Johannesburg in 1917.
In October 2017, AngloGold announced it had struck a deal to sell its Moab Khotsong underground mine in South Africa to Harmony Gold Mining Co. Ltd. for $300 million in cash, including related infrastructure, stakes in a water and nuclear fuels company and another underground mine called Great Noligwa. At the same time, AngloGold announced that it had entered into a separate agreement to sell its Kopanang mine, a gold plant and related infrastructure, to Heaven-Sent SA Sunshine Investment Company Ltd., a Chinese capital management company headquartered in Hong Kong, for ZAR100 million ($8.6 million) as well as some gold-bearing rock dumps.
AngloGold said its headline earnings for 2017, which strip out certain exceptional and one-off items, came in at 6 cents a share, down from 27 cents a share a year earlier. The company added that higher operating costs, due to stronger local currencies in South Africa and Brazil, also hit its bottom line. Net debt has risen 4.2% since Dec. 31, 2016 to $2 billion at the end of 2017, but has fallen 7% since June 30, 2017.
AngloGold shares on the Johannesburg Stock Exchange fell 3.9% Tuesday to ZAR116.05 a share, down 30% over the past 12 months.
Gold production rose 3.5% in 2017 from a year earlier to 3,755,000 ounces. Production guidance for 2018 is estimated between 3.325 million ounce and 3.450 million ounces.
The company received an average gold price of $1,258 an ounce in 2017, up 0.7% from 2016, though all-in sustaining costs rose 8.9% to $1,054 an ounce over the same period of time.
Revenue for the year rose 6.8% to $4.54 billion from 2016.
Write to Alexandra Wexler at email@example.com
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February 20, 2018 08:07 ET (13:07 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.