Business Context and Reporting Period
AngloGold Ashanti plc filed a Form 6-K in November 2023 enclosing unaudited operating information for the three and nine months ended September 30, 2023. The disclosure covers attributable gold production, processing volumes, grades, costs and capital expenditure. Detailed financial and operating results for full-year 2023 were expected in February 2024.
Key Operating and Financial Metrics
| Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 |
|---|---|---|---|---|
| Gold production | 673,000 oz | 738,000 oz | 1,909,000 oz | 1,971,000 oz |
| Total cash costs | $1,098/oz | $966/oz | $1,157/oz | $1,030/oz |
| All-in sustaining costs | $1,482/oz | $1,284/oz | $1,550/oz | $1,368/oz |
| Sustaining/stripping capital expenditure | $127 million | $95 million | $362 million | $269 million |
| Other sustaining capital expenditure | $95 million | $85 million | $222 million | $244 million |
| Non-sustaining capital expenditure | $50 million | $97 million | $183 million | $239 million |
Production declined approximately 9% year over year in the third quarter and 3% in the first nine months. Total recovered grade was 1.96 g/tonne in Q3 and 1.94 g/tonne for the nine-month period, compared with 2.13 g/tonne and 1.94 g/tonne, respectively, in the comparable periods.
Higher costs were the principal adverse change: Q3 total cash costs increased approximately 14% and all-in sustaining costs increased approximately 15%; nine-month increases were approximately 12% and 13%, respectively. The filing does not provide revenue, net income, operating cash flow, free cash flow, margins, debt balances or liquidity balances.
Material Changes Versus Prior Comparable Period
- Africa subsidiaries produced 860,000 ounces in the first nine months, down from 914,000 ounces, with lower production at Siguiri and Geita partly offset by higher Obuasi production.
- Australia production increased to 405,000 ounces from 397,000 ounces, primarily reflecting higher Sunrise Dam production, partly offset by lower Tropicana production.
- Americas production declined to 394,000 ounces from 420,000 ounces, including lower production at Cerro Vanguardia and AngloGold Ashanti Mineração.
- Nine-month Africa subsidiary all-in sustaining costs rose to $1,570/oz from $1,329/oz, while Americas costs rose to $1,908/oz from $1,687/oz. Australia costs increased to $1,490/oz from $1,325/oz.
- Nine-month sustaining/stripping capital expenditure increased to $362 million from $269 million, while non-sustaining capital expenditure decreased to $183 million from $239 million.
Guidance, Outlook, Risks and Unusual Items
The filing does not state explicit full-year 2023 production or cost guidance. Management indicated that full-year results with detailed financial and operating information were expected in February 2024.
Forward-looking matters include gold prices, production, costs, cost savings, operating performance, project milestones, acquisitions, dispositions, joint ventures, liquidity and capital expenditure. Key cited risks include inflation, international conflicts, political and regulatory changes, environmental approvals, gold-price and foreign-exchange volatility, litigation, supply-chain disruption, public-health events, mining accidents and other operational risks.
The reported measures include non-GAAP metrics, including total cash costs and all-in sustaining costs. The company cautions that these measures should supplement, rather than replace, IFRS results and may not be comparable with similarly titled measures used by other companies.
Investor Verification Items
- Verify the February 2024 full-year results, including revenue, earnings, cash flow, debt, liquidity and any changes to production or cost guidance.
- Assess whether higher unit costs persist, particularly at African and American operations.
- Review the causes and expected duration of production declines at Siguiri, Geita, Cerro Vanguardia and AngloGold Ashanti Mineração.
- Evaluate the increased sustaining and stripping capital requirements and their effect on free cash flow.
- Review project execution, environmental approvals, regulatory developments, litigation and country-risk exposures.
- Reconcile the unaudited operating data and non-GAAP metrics with the company’s subsequent IFRS financial statements.