Denver — A solid operating performance by
Gold production, at 1.75 million oz., was off slightly from the previous quarter. The decrease resulted from the sale of the Elandsrand and Deelkraal operations to
Although the average spot price for gold dropped to US$263 per oz. in the recent quarter, the price AngloGold received increased 5% to US$295 per oz., a reflection of its hedging policy. The company also decreased its hedge book by 800,000 oz. during the period.
Operating costs contributed significantly to earnings. In South Africa, operating profit was up 11%, partly because cash costs were held in rand terms and declined 3%, in dollar terms, to US$202 per oz. Worldwide, the company’s cash costs averaged US$193 per oz.
The Bambanani mine led the way, turning a R7-million loss in the fourth quarter of 2000 into a R21-million profit in the more recent quarter.
Contribution from operations in Africa (excluding South Africa) jumped 47% in the first quarter to 194,000 oz., following the acquisition of the company’s half-stake in the Geita mine in Tanzania. Operating profit grew 6% from the December 2000 quarter.
Geita contributed 60,000 oz. at US$141 per oz., while the 40%-held Morila mine, in Mali, pitched in 64,000 oz. at US$90 per oz. Meanwhile, construction and mining remain on schedule for a June gold pour at the Yatela project, also in Mali. AngloGold owns a 40% stake in that project, which is near the Sadiola mine.
At the Mponeng and Tau Tona operations, in South Africa, the company is busy developing the Upper Carbon Leader and Lower Carbon Leader reefs. Shaft deepening at Mponeng will stop at the 123 level, short of the originally proposed shaft bottom at the 135 level. The new plan, while reducing the estimated production, will increase the rate of return and extend the mine life at Tau Tona.
Tau Tona is expected to yield about 55 tonnes of gold; Mponeng, nearly twice that amount.
In other developments, AngloGold’s board of directors has approved a major expansion at the Cripple Creek and Victor mines in Colorado. At Cripple Creek, the US$194-million expansion would result in an additional 2.8 million oz. of production.
Godsell says AngloGold expects to maintain modest growth in earnings over the next two years. “From 2003, earnings will rise more sharply and large amounts of cash will be generated, from which we will repay debt,” he says.
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