Africa's No.1 gold miner reports quarterly loss on write-downs; output increases

09 February 2009

AngloGold Ashanti Ltd., Africa's largest gold miner, said its fourth-quarter loss widened after it took a $1.25-billion charge on former Ashanti assets.

The net loss widened to 11.87 billion rand ($1.22 billion) for the three months ended 31 December, compared with a loss of 247 million rand the previous quarter, the company said in a statement to Johannesburg's stock exchange today. South African gold companies compare earnings with preceding quarters rather than the same period a year ago.

The impairment charge related to changes in assumptions of gold prices and power costs, the company said. AngloGold bought Ghana's Ashanti Goldfields Ltd. in 2003. However, CEO Mark Cutifani said during a media teleconference that the group beat production forecasts as struggling mines improved, and that it continued to scout around for acquisition opportunities globally.

He said the company was also chipping away at its hedge book, one of the biggest among its peers globally, in order to increase its exposure to rises in the spot price of gold. "We are carefully and patiently looking to see good opportunities out there. We are patient and looking carefully right across the globe in Africa, Australasia and North America. We're having a bit of a sniff around," said Cutifani.

On asset sales, Cutifani said the company was trimming at the edges, but had no big plans after selling its 33.33-per cent stake in the Boddington gold mine project in Australia to bigger rival Newmont Mining Corp for up to $1.1 billion. Cutifani said the group, which has around 21 operations across four continents, expects to produce up to 5 million ounces this year, slightly less than previously forecast after selling Boddington.

The company said gold production in the three months to end-December was 1.268 million ounces, up from 1.265 million in the third quarter, while total cash costs at $422 an ounce showed a 13 per cent improvement on the previous quarter.