AngloGold Ashanti says it has bolstered its available liquidity to more than $2 billion dollars, improved leverage and more than trebled first quarter cash flow from operating activities as key mines delivered solid performances.
In a Press Released, the mining firm said a diverse portfolio of 14 mines in nine countries helped limit the impact of COVID-19 related stoppages to 11,000oz during the first quarter of 2020.
Again, it added that first quarter free cash flow before investment in growth projects, the measure on which dividend payments are based, rose 231% year-on-year to $94m.
Similarly, it stated that Cash flow from operating activities rose by 227 % from $67m to $219m over the same period.
“Cash flow is strong, leverage is down, and all operations are running,” Chief Executive Officer Kelvin Dushnisky said. “We’re making good progress on achieving our core strategic objectives – including asset sales and the redevelopment of Obuasi – and have worked hard to ensure we have the liquidity to weather potential disruptions.”
Additionally, AngloGold Ashanti says it has received a strong tailwind from bullion prices which averaged $1,506/oz during the first quarter of 2020 and have continued to rise in subsequent weeks as investors sought a safe haven.
The Company secured an additional $1bn credit facility to supplement cash on hand of around $1.1 billion as it increased its liquidity position to withstand any potential disruptions from the COVID-19 epidemic, the statement added.
Strategic objectives
AngloGold Ashanti, the press release further said, has made good progress in achieving its strategic objectives, namely the ongoing redevelopment of its Obuasi Gold Mine, investment in the increase of reserves and mine lives of its key assets, and the process to conclude the announced sales of assets in South Africa and Mali.
“These milestones were achieved despite disruption caused by COVID-19-related stoppages at Serra Grande, Cerro Vanguardia and the South Africa operations, which straddled the first and second quarters and have since been lifted”, portions of the release read.
On the issue of the announced sale of the South African Operations to Harmony Gold, the statement remarked that the institution had crossed an important hurdle. This is after the South African Competition Tribunal approved the transaction, without conditions, on 29 April 2020.
Consequently, it said “AngloGold Ashanti will no longer be selling its Cerro Vanguardia mine in Argentina, after concluding it can derive more value for shareholders by developing the remaining potential in the ore body”.
The ramp-up of Obuasi’s mining rate to 4,000 tonnes per day, from 2,000 tonnes per day, the company said, is now expected to occur in the first quarter of next year.
They attribute this to slower shipments of certain equipment to Ghana and difficulties in ensuring key, skilled employees can travel to the site amidst COVID-19-related border closings. The project remains on budget.
“The Company has taken a pragmatic approach in limiting the impact of the COVID-19 pandemic on its operations by building inventories of critical spares and ore stockpiles to improve the ability to respond to operational disruptions. The Company has also implemented innovative relief interventions across all host countries, working closely with governments, peers, and communities to help slow the spread of the pandemic”.
Read the full statement below
