Gold mining company AngloGold Ashanti has reported a soaring interim dividend improvement on strong free cash flow uplifted by the elevated gold price, operational improvement and cost reduction.

The first-half interim dividend was 450% higher and free cash flow reached the $206-million mark compared with the outflow of $205-million in the first half of 2023.

First-half earnings before interest, taxes, depreciation and amortisation rose 65% to $1.118-billion from $676-million.

The Denver-headquartered AngloGold stated that it was continuing to take steps to improve company valuation through ongoing cost performance and cash conversion as well as increasing the life of its key mines and prioritising successful project development.

“We expect to deliver an even stronger second-half performance,” AngloGold CEO Alberto Calderon stated in a Johannesburg Stock Exchange news service announcement covered by Engineering News & Mining Weekly.

“We took decisive steps last year to restructure our business in Brazil after a sustained period of losses. That created the foundation for this step-change in operating performance, which we will look to improve further,” Calderon added.

Total year-on-year cash costs an ounce were 1% lower and, influenced bythe improved second-half outlook, full-year guidance has been reaffirmed.

A former International Monetary Fund luminary, Calderon ascribed the improved results to “the hard work that’s been done to improve the fundamentals of our business”.

First-half gold production rose 2% to 1.25-million ounces from 1.23-million ounces in the same period a year earlier, and total cash costs per ounce fell 1% to $1 158/oz against the backdrop of AngloGold’s realised first-half inflation rate of some 6% reflecting the sum of price- related increases in the cost of goods and services at each site.

Group all-in sustaining costs (AISC) per ounce rose 2% to $1 589/oz compared with $1 555/oz in the same period of 2023.

Total cash costs per ounce for subsidiaries improved 1% to $1 200/oz and total cash costs per ounce for joint ventures (JVs) improved 2% to $866/oz.

AISC per ounce for subsidiaries increased 2% to $1 658/oz and AISC per ounce for JVs by 2% to $1 078/oz.

Gold production from AngloGold’s Americas segment of Mineração (Cuiabá), Serra Grande and Cerro Vanguardia increased by 10% to 257 000 oz from 234 000 oz in the first half of 2023.

Total cash costs per ounce from the business unit improved 18% to $974/oz from $1 185/oz in the first half of last year.

AISC per ounce in the South American region improved 27% to $1 414/oz from $1 932/oz in the same period last year.

Moreover, this region recorded a strong turnaround in free cash flow, recording an inflow of $149-million from an outflow of $127-million in the same period last year.

Second Quarter Bolsters Performance

Gold production in the second quarter rose 12% to 663 000 oz from 591 000 oz in the first quarter, with overall quarter-on- quarter gold production improvement following the recovery of Australia from first-quarter flooding.

Tropicana’s second-quarter gold production in Australia improved quarter-on-quarter by 38%, and Sunrise Dam’s by 14%.

At Siguiri in Guinea, where metallurgical recovery challenges hampered first-quarter performance, second-quarter gold production was up 67% quarter-on-quarter.

Across the remainder of the portfolio, improved second-quarter gold production contributions were recorded at Kibali in the Democratic Republic of Congo, which was up 8%, at Iduapriem in Ghana, which was up 6%, at Cerro Vanguardia in Argentina, which was up 5%, and at Geita in Tanzania, which was up 1%.

At Obuasi in Ghana, second-quarter gold production was 54 000 oz, with underground ore tonnes treated rising 7% as the mine ramped up open stope volumes.

Higher Price of Gold

Basic earnings in the first half of 2024 were higher than in the first half of 2023 mainly owing to more gold being sold, a higher average gold price received per ounce, lower operating costs, lower impairments and derecognitions of assets, higher equity earnings from JVs, higher finance income and lower foreign exchange losses, partly offset by higher losses on non-hedge derivatives, higher corporate and operating expenses, and higher taxation.

Basic earnings were $311-million, or $0.74 per share, in the first half of 2024 compared with a basic loss of $39-million, or $0.09 per share, in the same period a year earlier.

Following the improved first-half performance in production, cash costs and free cash flow, coupled with the strong balance sheet and expectations for continued improvements in the second half of the year, an interim dividend of 22c a share was declared, compared with 4c a share in the first half of 2023.

Geita Fatality

Tragically, a fatal accident occurred at Geita, where a contractor was killed in May when the light motor vehicle he was driving overturned. During an in-depth investigation into the incident, a clear series of steps were identified to avoid such accidents in the future.