AngloGold Ashanti has affirmed it’s on track to meet its cost and production target for this year, with the Obuasi mine expected to produce 400,000 ounces of gold next year.

Both the Obuasi and Iduapriem mines are expected to contribute significantly to its performance.

The mining giant said in a circular to investors and the general public that it’s on the path to building a robust free cash flow of $516 million in the first nine months of this year, and is expected to post its strongest financial performance in almost a decade.

 “AngloGold Ashanti has strengthened its balance sheet by reducing borrowings, increasing liquidity and extending the average maturity of its debt by issuing a $700m, 10-year bond at a coupon of 3.75%, the lowest it has ever achieved.

“The Company is on track to build on the robust free cash flow of $516m in the first nine months of the year and is expected to post its strongest annual free cash flow performance in almost a decade. Last month, the Company announced that it will double its pay-out ratio to 20% of free cash flow, before accounting for growth capital expenditure”, it noted.

It further said this will underpin a sharply higher dividend payment year-on-year.

“Improving direct returns to shareholders on a sustainable basis is central to AngloGold Ashanti’s capital allocation framework and a key strategic priority for the Company. Adjusted net debt is expected to fall further by year-end after already declining by nearly half to $875m, in the nine months through to 30 September 2020.”

AngloGold Ashanti also said sustainable mining remains the foundation of its strategy as it will continue to prioritise local procurement and employment from host countries and communities.

Obuasi & Iduapriem operations

On its operations in the country, it said the Obuasi Redevelopment Project in the Ashanti region, which sits on a 31 million ounces of gold remains on track to produce 4,000 tonnes a day.

“The Obuasi Redevelopment Project, which sits atop a 31Moz Obuasi Mineral Resource, remains on budget and on track to ramp up to a steady-state mining rate of 4,000 tonnes a day. The mine is expected to reach its full production rate in the second half of 2021”, the circular stressed.

At Iduapriem in the Western region, it said studies show its mine life will be extended for almost a decade.

Covid-19 impact on business

The mining giant said AngloGold Ashanti has adapted quickly to the COVID-19 pandemic, while doing its part to contribute to the global efforts to stop the spread of the virus and provide public health and economic relief to local communities.

“Notwithstanding the challenges posed to the business, the pandemic has proven AngloGold Ashanti’s social and sustainability capabilities, highlighting the strength of local participation at its global assets, relationships with governments and host communities, and the benefit of its diverse portfolio which supported the business during stoppages. This is all testament to the quality of the people in the business and their commitment to its values”, it emphasized.

Gold has seen a massive jump in price this year because of covd-19 pandemic.

AngloGold Ashanti share is presently selling at GH¢37 per share on the Ghana Stock Exchange.