AngloGold Ashanti has recorded an improved operational and financial performance in the second half of 2021 compared to the first half of 2021.

Production for the year ended 31st December 2021 was 2.472Moz, which was within the revised guidance range issued in August 2021, at a total cash cost of $963 per ounce.

This compared to 2.806Moz at a total cash cost of $790/oz for the year ended 31 December 2020.

The mining giant said production was lower mainly due to the company undertaking significant reinvestment across key assets, the temporary suspension of underground mining activities at Obuasi, the direct impact of COVID-19 in the first half of 2021, and secondary impacts of the pandemic, including on the mobility of labour, across the full year.

AngloGold Ashanti ended the fourth quarter of 2021 on a stronger note, with production increasing 8% quarter[1]on-quarter from 613,000oz in the third quarter of 2021 to 659,000oz in the fourth quarter of 2021, underpinned by solid performances at Sunrise Dam (+19%), Tropicana (+16%), AGA Mineração (+14%), Serra Grande (+50%), Siguiri (+10%) and Iduapriem (+10%).

The impact on production from COVID-19 was estimated at 47,000oz for the full year in 2021, compared to 59,000oz in 2020.

Costs

Total cash costs per ounce for the year were $963/oz compared with $790/oz for 2020.

Total cash costs increased mainly due to lower gold production, the drawdown of ore stockpiles at certain operations, higher operating costs and inflationary pressures.

Inflationary increases were mainly due to higher commodity prices and cost of services and labour.

Earnings

Basic earnings (profit attributable to equity shareholders) for the year ended 31 December 2021 were $622m, or 148 US cents per share, compared with $946m, or 225 US cents per share, for the year ended 31 December 2020.

Headline earnings for the year ended 31 December 2021 were $612m, or 146 US cents per share, compared with $1.0 billion, or 238 US cents per share, for the year ended 31 December 2020.

Headline earnings were lower year-on-year mainly due to lower gold production, higher operating and exploration costs, as well as other expenses related to care and maintenance at Obuasi ($45m), restructuring and related costs ($18m), foreign exchange ($43m) and costs associated with the tender offer for, and subsequent redemption of, the 5.125% notes due 2022 ($24m). These effects were partially offset by the marginally higher gold price received and lower net finance costs ($92m).

Capital Expenditure

Capital expenditure activities such as waste stripping at Tropicana, Iduapriem in Ghana and Sunrise Dam’s Golden Delicious pit continued and remained on track.

Total capital expenditure including equity-accounted joint ventures increased by 45% year-on-year to $1.1 billion in 2021, compared to $757 million in 2020. This increase was largely due to a 57% increase in sustaining capital expenditure to $778 million in 2021, from $497 million in 2020, which includes $137m for the Brazil TSF conversion.

Second half year review

Production for the second half of 2021 was 1.272Moz at a total cash cost of $925/oz, compared to 1.482Moz at a total cash cost of $807/oz for the last six months of 2020.

AISC was $1,376/oz for the last six months of 2021, compared to $1,069/oz for the same period in 2020. Net cash inflow from operating activities decreased to $801m for the second half of 2021, compared to $993m for the corresponding period in 2020.

The company generated $301m of free cash flow before growth capital during the last six months of 2021, compared to $679m during the second half of 2020.

For the last six months of 2021, basic earnings (profit attributable to equity shareholders) were $260 million, or 62 US cents per share, compared to $564 million, or 135 US cents per share, in the comparable period in 2020.