AngloGold Ashanti Limited has reported an improved second quarter performance compared to the first three months of the year, underpinned by a 12% increase in production.

According to its Interim 2023 half-year result, gold production rose to 652,000 ounces in the second quarter of 2023, versus 584,000 ounces in the previous three-month period.

The stronger second quarter was supported by production and cost improvements across most assets primarily driven by both higher tonnes processed and recovered grades.

Total cash costs improved 2% quarter-on-quarter and all-in sustaining costs (“AISC”) improved 4% quarter-on-quarter.

The company said it is taking steps to narrow a value gap with international peers by improving relative costs and the life of its key mines, all while enhancing safety, cash conversion and the delivery of projects. In the past year, the company added an additional 5 million ounces of Mineral Resource in Nevada, proposed a joint venture with Gold Fields in Ghana to create Africa’s largest gold mine, and proposed a change in the primary listing for its shares to the New York Stock Exchange (NYSE), the largest global market for investment in gold equities.

“We’re seeing momentum continue to build at our key assets after a steady start to the year and a much improved second quarter,” Chief Executive Officer Alberto Calderon said.

“We’re expecting strong operating improvements in the second half,” he added.

First-half 2023 capped by improved second quarter

Following a challenging first quarter of 2023, second-quarter production increased versus the first quarter at Kibali (38%), Geita (21%), AGA Mineração (63%), Serra Grande (47%), Sunrise Dam (8%) and Tropicana (16%).

The company said second quarter production would have been higher were it not for the carbon-in-leach (“CIL”) tank failure at Siguiri, which has since been repaired.

Second quarter total cash costs per ounce were 2% lower than in the first quarter of 2023.

Second-quarter total cash costs per ounce rose 8% year-on-year compared with the 16% year-on-year increase in first-quarter total cash costs per ounce.

Obuasi continues first-half ramp-up

First half production was marginally higher versus the first half of 2022, with a strong production gain from Obuasi supported by steady contributions from Sunrise Dam Geita, Iduapriem and Tropicana. Recovered grades continued their upward trend, increasing 4% year-on-year mainly due to ongoing reinvestment in the portfolio.

The Obuasi gold mine in Ghana continued its ramp-up with a 29% jump in production year-on-year alongside a drop in unit costs as grades and tonnages improved.

The company said Obuasi is expected to deliver a stronger second half performance as more material is moved to surface following successful debottlenecking of existing infrastructure.

In Brazil, the Cuiabá mine continued to produce gold from its gravity circuit and gold concentrate in line with its plan.

Despite the second-quarter improvements in production versus the first quarter of 2023, the Brazil portfolio continued to make losses.

Continued inflationary impact

Total cash costs per ounce increased 11% from $1,068 per ounce in the first half of 2022 to $1,189/oz in the first half of 2023, mainly due to costs related to Brazil of $20/oz and the Siguiri CIL tank failure of $22/oz, higher operating costs as a result of sustained inflationary pressures, higher waste stripping costs at Tropicana in line with expectations, lower by-product revenue and volumes in Brazil and Argentina, and higher royalties paid due to higher revenues.

The increase was partially offset by weaker foreign exchange rates against the US Dollar and favourable inventory movements.

AISC were 12% higher at $1,587/oz in the first half of 2023 compared to $1,418/oz in the first half of 2022, mainly due to higher total cash costs and a planned increase in sustaining capital expenditure.

Basic earnings were $40 million, or 10 US cents per share, in the first half of 2023, compared to basic earnings of $298 million, or 71 US cents per share, in the same period a year earlier.

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