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Anglo’s slow start ends with strong Q2 operating recovery

AngloGold Ashanti has achieved a strong operating recovery in its second quarter after a slow start to the year.

The company’s Chief Executive Officer Srinivasan Venkatakrishnan said, “We saw an exceptionally strong operational recovery in the second quarter after a slow start to the year, and we achieved that whilst setting new safety benchmarks across our portfolio.”

The company noted for the first time ever, three back-to-back quarters passed with no fatal accident at any of the company’s operations, including its ultra-deep South African mines, which registered 339 days fatality-free at the end of June 2017.

“Every operation surpassed a million fatality-free shifts. Yatela, Geita, Iduapriem, Obuasi, La Colosa, Gramalote, Quebradona and Greenfields Exploration ended the second quarter with no injuries at all,” the company said in a statement.

The copany noted however that South African costs were negatively affected by lower gold output, higher input costs and the stronger rand. South African gold output fell to 435 000oz from 486 000oz, an average of 9% in the period.

“The cost performance of certain operations, notably TauTona and Kopanang, has been a clear demonstration of these challenges, with all-in costs in the first-half of this year of $1,858/oz and $1,682/oz respectively,” the company said. “Both mines also sustained significant operating losses in 2016.”

AngloGold said, it had maintained its full-year cost and production guidance. The company has kept all of its brownfield projects on budget and on schedule, as it delivered gold production of 1.748Moz for the first half of the year.

“Our brownfield projects are on budget and on schedule, and we are working diligently to maintain this strong momentum through the rest of the year. We continue to focus on our long-term strategy of improving the underlying quality of our portfolio through investment in high-return projects and removal of loss-making ounces.”

Production was 1.748Moz at a total cash cost of $796/oz for the six months ended 30 June 2017, compared to 1.745Moz at $706/oz in the first half of last year. All-in Sustaining Costs (AISC) for the six months ended 30 June 2017 were $1,071/oz compared to $911/oz in the first half of last year, reflecting the impact of stronger operating currencies, lower grades, cost inflation and the planned increase in sustaining-capital expenditure.

The Company recovered from the first quarter underperformance, with second quarter production increasing 11% to 918 000oz, from 830 000oz in the first quarter.

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