AngloGold half-year earnings more than double, annual dividend up 74%

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AngloGold Ashanti's headline earnings more than doubled to $259 million (R3.9 billion) for the six months ended December 2019.

The gold mining company, which recently sold its South African assets to Harmony Gold for about R4.4 billion, on Friday released its half-year results on Friday.

The group's headline earnings per share stood at 62 US cents (about 941c in rand terms) up from 29 US cents (about 440c in rand terms) reported in 2018. The annual dividend increased 74% to 11 US cents or 165c in rand terms.

AngloGold Ashanti also reported no fatalities during the period – a first in its history.

Apart from exiting the SA market, AngloGold also sold off the Sadiola mine in Mali and restarting its Obuasi mine in Ghana. This is part of the group's strategy, as announced by CEO Kelvin Dushnisky to focus on profitable mines in Ghana, Australia and the Americas, Bloomberg previously reported.

During the six-month period, the group's total borrowings increased 7% from R2.05 billion to R2.2 billion, while its free cash flow increased by over a third from $118 million reported in 2018 to $159 million – the strong cashflows meant that more value could be delivered to shareholders, according to Dushnisky.

"We're working hard to deliver on our strategy and to capture the wider margin in this strong gold price environment," said Dushnisky. "We're generating strong cash flow from our operations, and that's allowing us to increase returns to shareholders, strengthen our balance sheet and invest in our ore bodies," he added.

The company's production levels stood at 3.281Moz at a total cash cost of $776/oz for the full-year ended December 31, 2019, compared to 3.400Moz at a cash cost of $773/oz recorded in the previous year. Its half-year production levels stood at 1.727Moz at a total cash cost of $762/oz, compared to the half-year results of the previous year with production at 1.772Moz and a cash cost of $726/oz.

"The company reported exceptional performances from its Geita, Kibali, Tropicana and Iduapriem mines, with production and efficiency gains partly offset by operating challenges at its Siguiri and Sunrise Dam mines," the notice read.

Production estimates for 2020 are expected to be between 3.050Moz and 3.300Moz, with total cash costs are estimated between $775/ oz and $825/oz.

Looking ahead, capital expenditure for the coming period is expected to be between $920m and $990m – with investments directed at growing ore reserves.

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