Tags: anglogold | loss | dividend | gold bullion

AngloGold Posts Loss and Suspends Dividend as Bullion Drops

Wednesday, 07 Aug 2013 07:11 AM

AngloGold Ashanti Ltd., the world’s third-largest producer of the metal, reported a loss for the second quarter and suspended its dividend after bullion had a record three-month decline. The stock dropped to a 12-year low.

The adjusted headline loss, which excludes one-time transactions, was $135 million in the three months through June, from a profit of $113 million in the previous quarter, the Johannesburg-based company said in a statement. The shares dropped as much as 4.9 percent and traded 2.4 percent lower at 119 rand at 9:15 a.m. in Johannesburg, the lowest intraday level since April 6, 2001.

AngloGold, which has 21 operations in 10 countries, is cutting capital expenditure and slowing output at higher-cost mines as it adjusts to a gold price that has tumbled almost 22 percent this year. The company expects to begin mining gold at two low-cost mines in the Democratic Republic of Congo and Australia later this year.

“There are going to be two more tough quarters in 2013 as we make these changes, but going into 2014 we will see the full benefit of the two new projects and the cost savings and capex savings come through,” Chief Executive Officer Srinivasan Venkatakrishnan said in a call with reporters.

AngloGold plans to trim its all-in costs to $1,200 an ounce this year and to $1,000 an ounce in 2014 by reducing capital expenditure, exploration costs and cutting jobs in its corporate function, Venkatakrishnan, known as Venkat, said.

Exploration Budget

The company will cut 800 employees from the 2,000 people that work in its corporate offices around the world and reduce its exploration budget by 60 percent, it said.

AngloGold’s breakeven costs were $1,634 an ounce in the first quarter due to its two new mines, compared with an average gold price of $1,633 an ounce, according to David Davis of SBG Securities Ltd. in Johannesburg. The average gold price was $1,417 in the second quarter, according to data compiled by Bloomberg.

AngloGold produced 935,000 ounces of gold in the second quarter, in line with the forecast published July 15, and 4 percent more than in the first three months of the year. Production will total between 4 million and 4.1 million ounces this year, down from previous forecast of 4.1 million ounces to 4.4 million ounces, the company said in July.

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