World number two gold miner AngloGold Ashanti on Friday reported a 29 percent decline in adjusted headline earnings per share to 127 cents for the June quarter from 179 cents in the March quarter.
Eight analysts polled by I-Net Bridge had expected adjusted headline earnings per share of 138 cents. Analysts' forecasts ranged from 80 cents to 191 cents.
AngloGold Ashanti reported June quarter headline loss per share of nine cents, down from 128 cents profit in the March quarter.
First set of joint results
This is the first set of financial results published by AngloGold Ashanti since the merger of AngloGold and Ghana's Ashanti Goldfields in late April.
Gold output for the June quarter was 1.490 million troy ounces, up 21 percent from 1.235 million oz in the March quarter.
The group reported a 40 percent decline in interim adjusted headline earnings per share to 303 cents for the half-year to June from 507 cents during the same period in 2003.
Half-year headline earnings per share declined by 78 percent to 111 cents from 502 cents before. Interim production fell four percent to 2.725 million oz from 2.836 million oz previously.
Decline in output
The decline in output was attributed to the exceptionally high production at Morila mine, Mali in the first half of 2003 and the sale of Jerritt Canyon in the US in June 2003, partly offset by the increase in production from the Ashanti operations.
AngloGold Ashanti declared a dividend per share of 170 cents, down from 375 cents before.
The performance of the former AngloGold mines improved during the June quarter from the March quarter, with 14 of these 17 operations increasing or equalling their gold production for the previous quarter, AngloGold Ashanti CEO Bobby Godsell said in a statement.
"Particularly pleasing were the improvements at Cripple Creek & Victor, which reported a six percent improvement in production and Cerro Vanguardia, where production was 34 percent higher," he added.
Tough quarter for Ashanti assets
However, the former Ashanti gold assets had a tough quarter.
"Production was low, as expected, due to the chronic under-capitalisation of the operations, which was exacerbated by the delay in the closure of the merger," Godsell said.
"Despite a further 2.5 percent strengthening in the rand to an average of 6.59 rand/dollar and the consolidation of the Ashanti mines which had higher total cash costs for the quarter, the total cash costs of the group were almost unchanged at $260/oz in June compared to $259/oz in March," AngloGold Ashanti said in a statement.
"This was due to the cost reduction initiatives currently being implemented across the group. Particularly noteworthy were the costs of the South African operations which, in local currency terms, decreased by four percent to R59 016/kg, while operations in all countries except Mali, Namibia, Tanzania and Argentina posted modest reductions in costs," the group added.
The received price of gold during the June quarter fell by $20/oz to $385/oz compared with an average spot price of $393/oz during the period.
Trans-Siberian Gold move
The agreement to acquire a 29 percent stake in Trans-Siberian Gold, for £17.6-million, was a first move into Russia that allowed AngloGold Ashanti the opportunity of establishing an association with credible partners who were familiar with the operating environment, Godsell said.
Looking to the September quarter, AngloGold Ashanti said it anticipated producing about 1.6 million oz at a total cash cost of about $263/oz — based on an exchange rate of 6.59rand/dollar.