South African miner AngloGold Ashanti (ANGJ.J) said on Monday that it expects its full-year production will be at the low end of its forecast range after output fell in the third quarter from a year ago and costs rose sharply.
Shares in the miner, which had rallied around 83% since the start of this year as the company benefited from surging gold prices, were down 2.9% by 1023 GMT after the sluggish production data.
The miner said its output in July-September fell 3% from a year earlier, hit by lower ore grades at its Mponeng mine in South Africa, as well as a planned reduction in output at the Cerro Vanguardia mine in Argentina and at its open-pit mining at Kibali in Democratic Republic of Congo.
AngloGold’s total costs rose 12% year-on-year in the third quarter. However, its free cash flow also jumped 12% from a year earlier thanks to higher gold prices, and it said its Obuasi project in Ghana would start by year-end.
Gross profit jumped 52% from the same quarter last year to $281 million, helped by the rise in gold prices, and the higher free cash flow helped bring debt down and take the company’s net debt to EBITDA ratio to 1.06, close to its target of 1.
AngloGold Ashanti said its planned asset sale in South Africa, including the Mponeng mine, was progressing at a steady pace, adding the market could expect an update by the end of this year.
Sibanye-Stillwater and Harmony Gold have both signaled interest in the Mponeng mine, the world’s deepest, which AngloGold put up for sale in May along with a processing business and mine waste retreatment operation.