Upbeat Anglo fails to convince

AngloGold Ashanti’s share price fell as much as 9% on Monday, though it said it expected its headline earnings per share for the year to end-December to surge more than sevenfold.

AngloGold Ashanti’s share price fell as much as 9% on Monday, although it said that it expected its headline earnings per share for the year to end-December to surge more than sevenfold.

The ramping up of production at Kibali mine in the Democratic Republic of Congo (DRC) has lifted AngloGold Ashanti’s bottom line, as did lower development costs at an ore-development project in Brazil.

Cost-savings were due to the closure of the company’s Tautona mine in 2017, as well as increased production at new assets, notably Kibali. This mine delivered income of $95m during the period, or 23c per share in earnings.

AngloGold Ashanti said that it expected to report headline earnings of between $297m and $227m during the period, a 666% to 729% increase on the previous matching period.

Basic earnings were expected to rise to between $129m and $137m, after the previous matching period’s basic loss of $191m.

A once-off payment of $46m, or 11c per share, weighed down the company’s performance in the 2017 financial year.

According to the group, the costs emanated from a settlement of silicosis class-action claims, and related expenditure.

AngloGold Ashanti is in the process of rationalising its 14 assets, saying that this number may be inappropriate given its size.

The group’s share price reached an intraday low of R172.02 at 12.17pm on Monday. It rose 41.31% during 2018, lifted by a rising bullion price, which is hovering at an eight-month high this week.