AngloGold Ashanti records 5% production gain

The Ghana Stock Exchange listed world gold miner, AngloGold Ashanti, has reported an adjusted headline loss for the third quarter, due to costs related to trimming its hedge book and stronger currencies.

AngloGold, Africa's top gold producer, said production rose 5% in the three mo nths to the end of September, but guided full year output lower due to an incident at its TauTona mine in South Africa.

The group also cut its gold hedge book further during the quarter, bringing itself closer to its target of winding up the forward sales of gold by 2014 in a bid to benefit from the rising spot price of bullion. AngloGold Ashanti has reduced its hedge book from 11.3 million in 2007 to less than 4.5 million ounces.

AngloGold said in a statement that it posted an adjusted headline loss of 165 US cents per share in the third quarter, after taking into account the cost of the hedge buybacks. This result compared to record adjusted headline earnings per share of 47 U.S. cents a share in the June quarter.

The group, which has about 20 operations in four continents, said stronger operating currencies in key regions continued to erode the benefit of a stronger bullion price.

Although the gold price in the third quarter rose by an average of 4% on the previous three months, the firmer rand eroded most of those gains for its South African operations, which comprise 40% of the group's output. Gold producers sell their gold in dollars and pay their costs in the local currency of the countries they operate in.

Third quarter gold production rose 5% to 1.187 million ounces on total cash costs of $534 per ounce compared with 1.127 million ounces in the June quarter on total cash costs of $472 per ounce. In Ghana where AngloGold Ashanti has two operating mines; gold production at Iduapriem went up by 11% to 52,000 ounces at $493per ounce. Obuasi produce 92,000 ounces at $671 per ounce in the same third quarter.

AngloGold said safety stoppages and mill repairs had forced it to lower its full-year guidance to between 4.7 million and 4.8 million ounces from its original target of 4.9 million to 5 million ounces.