AngloGold Ashanti withstood COVID-19-related disruptions to deliver a solid first half production performance and a surge in free cash flow generation to $177m, most of it coming in the three months to June 2020.

Free cash flow rose to an inflow of $177m for the first six months of the year, compared to an outflow of $31m in the same period last year. Of that amount, $173m was generated in the second quarter of the year. Free cash flow before growth capital, the metric on which dividends are calculated, rose 376% - or nearly fivefold - to $324m.

“The business is in excellent shape - cash flows are extremely robust, demonstrating the significant operating leverage we have to this strong gold price,” Kelvin Dushnisky, outgoing Chief Executive Officer (CEO) of AngloGold Ashanti, said. “While the recent rally in the gold price is welcome, tight cost and capital management will continue to be the key focus areas for us as we work to capture this widening margin and increase reserves.”

AngloGold Ashanti is investing in the redevelopment of its Obuasi Gold Mine, as well as exploration and ore reserve development to increase its operating flexibility and increase reserves. Interim CEO Christine Ramon will continue to focus on the inward investment programme, with rigorous capital allocation guidelines including leverage and return targets.

Operating Performance Production in the six months ended 30 June 2020 was 1.469Moz at a total cash cost per ounce of $810/oz, compared to 1.554Moz at $792/oz for the first six months of last year.

Geita delivered an outstanding performance, Serra Grande posted a strong recovery from the first quarter while Kibali, Iduapriem, Tropicana and AGA Mineração delivered steady production.

All-in sustaining costs (AISC) were $1,031/oz for the first six months of 2020, compared to an AISC of $1,002/oz for the corresponding period last year. The adverse impacts of COVID-19 on production in the first half of the year was limited to an estimated 85,000oz, of which 63,000oz related to the South African operations.

AISC were impacted by $53/oz. Second quarter production increased 5% over the first quarter of 2020, rising to 753,000oz from 716,000oz. Quarter-on-quarter production improvements were recorded at Sunrise Dam, Serra Grande, Iduapriem, Obuasi, Geita, Siguiri and Cerro Vanguardia (CVSA).

The Board of Directors of the Company (Board) thanks Kelvin for his role in advancing AngloGold Ashanti’s strategy and wishes him the very best in the future. Kelvin will remain in Toronto to spend time with his family but will be available to assist the group with a smooth handover until 28 February 2021.

“Kelvin has done an excellent job in delivering on the Company’s strategy and leaves AngloGold Ashanti in solid shape, with an improving portfolio, robust cash flows and ongoing debt reduction,” Sipho M. Pityana, AngloGold Ashanti’s Chairman, said. The Board is also pleased to announce the appointment of Ms. Christine Ramon, currently Chief Financial Officer (CFO) and Executive Director, as Interim CEO.

Christine will assume the role from 1 September 2020, while the Board embarks on a comprehensive recruitment process to find a new permanent CEO. Mr. Ian Kramer, currently Senior Vice President: Group Finance, will assume the role of Interim CFO for the duration of the transition period. The information contained in this announcement has not been reviewed or reported on by the Company’s external auditors. The figures and results contained in this announcement include continuing and discontinued operations, unless otherwise stated.