Accra, Aug. 4, GNA – AngloGold Ashanti posted record adjusted headline earnings of $342 million in the second quarter after production and costs improved amid record gold prices.

“We did a good job of containing costs and growing production, despite some difficult production issues,” Chief Executive Officer, Mark Cutifani said.

“Our focus on driving free cash-flow generation and returns is evident in these results and this positions us well as we grow through a prudent, well-managed capital programme,” he said in a statement received by GNA in Accra on Thursday.

It said AngloGold Ashanti eliminated the gold industry’s last remaining major hedge book in October, last year, improving cash flow and earnings by increasing exposure to the rising gold price.

The statement said the company was also in the process of implementing a new operating model to improve productivity across its 20 existing operations and a portfolio of development projects as it expanded production by around one million ounces to 5.5 million ounces in 2014/2015.

Adjusted headline earnings in the three months to June 30 were $342 million, or 89 US cents a share, compared with $203 million, or 53 US cents a share the previous quarter.

The Continental Africa operations were a significant contributor, with the Geita (Tanzania) and Obuasi (Ghana) mines both delivering cost and production improvements.

The South African operations increased production by seven per cent and contained cost increases to eight per cent, despite inflationary pressures including annual power-tariff increases and a stronger local currency.

Cash flow generated from the company’s operating activities during the first quarter rose by 24 per cent to a record $636 million.

Net debt improved by another 22 per cent to $866 million underscoring the improvement in AngloGold Ashanti’s cash generation, even after the company funded its capital expenditure requirements.

The improved cash flow allowed for a 38 per cent increase in the interim dividend to 90 South African cents a share. In dollar terms, the 13 US cents a share dividend represents a 44 per cent improvement compared with last year’s interim payout.

Production was 1.086 million ounces at a total cash cost of $705/ounce in the three months to 30 June, compared with 1.039 million ounces at $706/ounce the previous quarter

The statement said additional exploration at the Vogue discovery, beneath the Sunrise Dam operation in Australia, returned high grade intersections reflecting improved potential to increase the size of the deposit, as did drilling at the Cerro Vanguardia mine in Argentina.

It said tragically, three fatalities were recorded after an underground mining incident in South Africa and separate accidents in Brazil and at an exploration camp in North Africa.

“The company’s long-term safety performance remains markedly better than three years ago, when the new safety strategy was launched. This is reflected in an improvement of around 80 per cent in its fatality injury frequency rate over the period. Efforts continue to push toward an elimination of workplace injuries,” the statement said.

It said projection for the year had been updated to around 4.45 million ounces at a total cash cost of $725/ounce to $740/ounce.