JOHANNESBURG (miningweekly.com) – In the first quarter (Q1) of this year, gold mining company AngloGold Ashanti has reported a sevenfold increase in free cash flow and an almost eightfold rise in profit attributable to equity shareholders compared with the corresponding period of last year, underpinned by higher gold production, while there was a smidgen in cost rise, amid an average gold price received per ounce increasing to $2 874/oz from $2 063/oz in Q1 2024.

Free cash flow was up by a stunning 607% to $403-million on 22% more gold production and the cost rise was a mere 1%. (Also watch attached Creamer Media video.)

Managed operations delivered an even higher 28% increase year-on-year, primarily driven by the first-time contribution from the recently acquired Sukari gold mine in Egypt and solid output improvements at Siguiri in Guinea and Tropicana in Australia.

"This is a very strong start to the year, particularly at our managed operations,” AngloGold CEO Alberto Calderon remarked during Friday's presentation of results covered by Mining Weekly.

“We’ve seen strong growth in production with the addition of Sukari and our cost control efforts continue to offset inflation, which has ensured that we capture the benefit of the higher gold price.”

AngloGold Ashanti remains committed to closing the valuation gap with its North American peers by driving continuous improvements in operating performance, enhancing cash conversion, extending life-of-mine, and maintaining a disciplined approach to capital allocation.

The company continues to actively manage its portfolio, with the sale earlier this week of the Doropo and ABC Projects in Côte d'Ivoire as it seeks to sharpen focus on its existing operations and projects in the US.

QUARTERLY DIVIDEND IN LINE WITH NEW POLICY

Under its new dividend policy, AngloGold Ashanti will target a 50% payout of annual free cash flow, subject to maintaining an adjusted net debt to adjusted Ebitda ratio of 1.0 times.

The new dividend policy also introduced a base dividend of $0.50 a share a year, payable in quarterly instalments of $0.125 a share.

When required, a true-up payment in Q4 of each year will top up the annual base dividend of $0.50 a share to reach the 50% annual free cash flow target. The base dividend establishes a minimum return, ensuring consistent shareholder payouts throughout commodity price cycles. An interim dividend of $63-million, or $0.125 a share, was declared for Q1 2025.

The balance sheet is continuing to strengthen. Adjusted net debt fell 60% year-on-year to $525m in Q1 2025 from $1.322-billion in Q1 2024. The net debt to Ebitda ratio improved to 0.15x in Q1 2025, from 0.86x in Q1 2024. There was about $3-billion in liquidity, including cash and cash equivalents of $1.5-billion, at quarter end.

MANAGED OPERATIONS DRIVE IMPROVEMENTS

Sukari is Egypt’s largest gold mine and its first full- quarter contribution of 117 000 oz drove the 22% gold production uplift to 720 000 oz and 28% at managed operations, where total cash costs per ounce decreased 2% year-on-year to $1,213/oz and all-in sustaining costs per ounce to $1 657/oz.

Non-managed joint ventures experienced grade challenges, however, which caused a 17% reduction in gold production leading to a 59 % increase in total cash costs per ounce and a 37% rise in AISC per ounce.

Year-on-year gold production improvements were achieved at Siguiri, which reported a 32 000 oz improvement, Tropicana, 21 000 oz, Cerro Vanguardia, 5 000 oz, Sunrise Dam 5 000 oz) and Geita, 2 000 oz.

First-quarter capital expenditure was a 27%-higher $336-million, which included $236-million in sustaining capital expenditure (capex) and $100-million in growth capex.

GUIDANCE REAFFIRMED

Full-year group gold production is forecast to range between 2.900-million ounces and 3.225-million ounces.

Total cash cost per ounce is forecast to range between $1 125/oz and $1 225/oz in 2025 and AISC per ounce between $1 580/oz and $1 705/oz.

Total 2025 capital expenditure is expected to be between $1 620-million and $1 770-million.