Geita powers Ashanti

Ghana-based Ashanti Goldfields (ASL-N) saw its profits nearly double during the third quarter, thanks in part to increased production at its 50%-owned Geita mine in Tanzania.

Earnings totalled US$14.5 million (or 13 per share) on revenue of US$136.2 million, compared with US$7.5 million (7 per share) on US$146 million in the third quarter of 2000.

For the first nine months of this year, Ashanti earned US$37.6 million (33 per share), up from US$20.8 million (18 per share) in the year-ago period. The increase reflects lower depreciation and interest charges. Revenue between the two periods slid to US$405.6 million from US$435.8 million.

Quarterly cash flow from operations amounted to US$25.1 million; for the nine months, US$66.6 million. During the corresponding periods of 2000, cash flow totalled US$36 million and US$99.8 million.

Company-wide gold production between the two third quarters slid to 411,532 oz. (393,958 attributable ounces) from 448,208 oz. (429,141 oz.), while total cash costs rose to US$189 from US$181 per oz. Nine-month production fell to 1.25 million oz. (1.2 million attributable ounces) at US$188 per oz. from 1.3 million oz. (1.2 million oz.) at US$191 per oz.

The company realized an average price of US$331 per oz. in the quarter (US$327 a year earlier) and US$325 per oz. for the nine months (US$335 per oz.).

The Geita mine cranked out 143,116 oz. in the recent quarter, compared with 75,036 oz. a year ago, while cash costs climbed to US$140 from US$131 per oz. Over the nine months, Geita produced 407,476 oz. at US$139 per oz., well ahead of target. AngloGold (AU-N) owns the other half of Geita.

Meanwhile, at the Obuasi mine in Ghana, gold production reached 132,307 oz. at US$196 per oz. during the quarter — on target, but 11.4% behind last year’s level. Nine-month production totals 394,028 oz. at US$193 per oz., compared with 503,849 oz. at US$210 per oz. in the year-ago period.

Recent drilling at Obuasi cut a high-grade mineralized zone grading 28 grams gold per tonne over a true width of 8 metres. The interval occurred on the 62 level and is the deepest ore-grade intersection ever reported at the mine.

At the end of the quarter, the mark-to-market value of Ashanti’s hedge book was US$41 million, based on the spot gold price of US$291 per oz.

The company also lowered its net debt to US$283.4 million.