Gold miner AngloGold Ashanti reports that its headline earnings for the year ended December 31, 2020, are expected to be between $962-million and $1.03-billion, with headline earnings per share (HEPS) to be between $2.29 and $2.47.

Headline earnings and HEPS for the 2019 financial year were $379-million and $0.91, respectively.

In terms of operational performance from both continuing and discontinued operations, AngloGold Ashanti reports that it expects production to be 3.05-million ounces, compared with the 3.28-million ounces produced in 2019.

The decline in production is mainly owing to the sale of the South African operations and the impact of the Covid-19 pandemic on production. The company had sold its last remaining South African assets, including the Mponeng mine, to Harmony Gold.

However, the performance for the year was underpinned by a record year at Geita, and steady performances at Kibali, Iduapriem, Siguiri, Sunrise Dam, and AGA Mineração which helped offset declines in production at Tropicana, Cerro Vanguardia and Serra Grande.

The Obuasi redevelopment project continued its ramp-up, delivering 127 000 oz of production despite delays in receiving equipment and in the arrival of critical skills for the project as a result of lockdowns in various jurisdictions during the year.

FINANCIAL PERFORMANCE

Basic earnings from continuing operations for the period are expected to be between $910-million and $982-million, resulting in total basic earnings a share from continuing operations of between $2.16 and $2.33.

The basic earnings from continuing operations and earnings a share from continuing operations for the comparative period were $364-million and $0.87, respectively.

The expected overall increases in headline earnings and basic earnings from continuing operations for the period compared with the comparative period were primarily the result of the gold price having increased by 27% and weaker local currencies more than offsetting inflationary increases across operating jurisdictions.

Income from joint ventures, mainly Kibali, also increased by $110-million (post-tax).

In addition, care and maintenance costs of $47-million (post-tax), or $0.11 a share, incurred at Obuasi in the comparative period were not repeated in the current period.

However, the increases in earnings were partly offset by noncash adjustments, the derecognition of the remaining deferred tax assets after the $69-million sale of the South African operations in the period under review. They were also offset by the discounting of the Argentine export duties receivable, which resulted in a decrease in earnings of $15-million (post-tax).

Other income statement effects include adverse inventory and stockpile movements; and higher taxes, withholding taxes and royalties paid in the period in most jurisdictions as a result of the higher gold price. These also included additional losses realised on oil and gold derivatives of $17-million (post-tax) when compared to the comparative period; and a Brazilian power utility refund received in April 2019 of $11-million (post-tax) not repeated in the current period.

Further, AngloGold reports that basic earnings from continuing operations were favourably impacted by a profit of $18-million (post-tax) as a result of the disposal of the company’s interest in the Sadiola and Morila joint ventures (JVs). This profit is excluded from headline earnings.

Meanwhile, the company also notes that the reconciliation of basic earnings from continuing and discontinued operations to headline earnings primarily included a profit of $18-million (post-tax) as a result of the disposal of the company’s interest in the Sadiola and Morila JVs being excluded from headline earnings, as was a noncash impairment reversal of $17-million (post-tax) relating to the sale of the South African operations to Harmony.

This also included a loss on the sale of the South African operations to Harmony of $81-million (post-tax).