Accra, May 16, GNA - AngloGold Ashanti posted adjusted headline earnings (excluding cost of accelerated hedge buy-back) of $203 million in the first quarter of the year, a statement copied to Ghana News Agency on Monday said.

It said the $203 million-earnings or 53 cent per share, compared with $61 million, or 17 cents for the corresponding quarter in 2010, was due to improved year-on-year performance from the South African mines and full impact of higher bullion prices.

"The first three months of the year traditionally have the lowest production given that South African mines restart operations after the Christmas break," the statement noted.

The company also boosted cash flow from its operations after eliminating its hedge book last year to reap the full benefit of record gold prices.

It said cash flow generated from the company's operating activities during the first quarter was $513 million. Net debt (excluding mandatory convertible bonds) improved by another 15 per cent to $1.1 billion, underscoring the improvement in AngloGold Ashanti's cash generation, even after the company funded its capital expenditure requirements.

"The business is generating strong, steady cash flow now that we're capturing this higher gold price," Chief Executive Officer Mark Cutifani said in the statement.

"We're now focused on driving operational improvements through the business and advancing our growth projects," he added.

The statement further said: 93Production was 1.039Moz at a total cash cost of $706/oz in the three months to March 31, 2011, compared with 1.079Moz at $619/oz the for the corresponding quarter last year, and guidance for the first quarter of 1.04Moz at $675/oz to $700/oz," it added.

It said the result was achieved despite a five-day stoppage at TauTona, in South Africa, following a seismic event and also flooding at the company's Sunrise Dam mine in Western Australia. Strong performances from the Continental Africa and Americas operating regions helped claw back the lost production.

AngloGold Ashanti announced a significant new discovery beneath the current workings of its Sunrise Dam mine, which has the potential to yield between 2Moz-5Moz.

Drilling at its Cerro Vanguardia mine in Argentina also provided a high-grade interception of gold and silver at a depth of 400 metres, some 200 metres beneath where the current mineralisation was previously thought to end.

At La Colosa, in Colombia, drill results continue to confirm confidence in the potential of the ore body.

Tragically, two fatalities were recorded after separate incidents in South Africa and Ghana. The company's reported fatal incident rate has now dropped more than 90 per cent since the introduction of the 93Safety is Our First Value" approach in late 2007.

General safety incidents have reduced by more than 50 per cent over that same period. Efforts continue on a range of fronts to deliver on the company's vision for a 93no harm" workplace.

Guidance for the second quarter is 1.09Moz at $760/oz, assuming an exchange rate of R6.75 to the dollar and Brent crude price of $120 a barrel.

This takes into account the impact of the rainfall at Sunrise Dam, a decision to halt mining of the VCR pillar at TauTona following the seismic event in February and maintenance at the Geita mill.

AngloGold Ashanti anticipates a stronger second half performance on both cost and production.