AngloGold Ashanti’s shares fell after it announced an expected drop in interim earnings yesterday of between 82% to 92% due to impairments at its Brazilian operations.
By 5pm the share was 7.64% lower at R364.46 on the JSE yesterday.
In its trading statement for the six months ended June 30, 2023, the group said basic earnings for the period were expected to be between $25 million (R447bn) and $54m, resulting in basic earnings per share between 6 US cents and 13 US cents, a decrease of between 82% to 92% from the comparative period.
AngloGold Ashanti said the expected decrease in basic earnings was the result of non-cash impairments and derecognitions at its Brazilian operations, which totalled $103m net of tax, or 24 US cents.
"These non-cash impairments related to continued operational underperformance at Córrego do Sítio, Cuiabá’s Queiroz metallurgical plant, which suspended operating activities while the buttress at the Calcinados tailings storage facility (TSF) is designed and completed, and derecognition of legacy TSFs no longer in use," the group said.
The company said both basic earnings and headline earnings were further impacted by higher non-cash environmental provisions of $38m net of tax, or 9 US cents, for legacy TSFs following the implementation of new legislation in Brazil.
The group said gold production was expected to be 1.236 million ounces (Moz), compared to 1.233Moz for the comparative period.
"Gold production is expected to be marginally higher year-on-year, following a stronger second quarter, with increased production contributions from Obuasi, Sunrise Dam, Geita, Iduapriem and Tropicana.
"The increase in gold production was mainly driven by higher overall recovered grade for the group, partially offset by lower tonnes processed, including at AGA Mineração following the transition to gold concentrate sales, at Geita following the planned mill shutdown, which has been completed, and at Siguiri following the CIL tank failure, which has since been repaired," the group said.
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