AngloGold Ashanti delivers solid performance in 2022, with increased gold production and cost control
AngloGold Ashanti, the world’s third-largest gold mining company, reported significant progress in 2022 as it achieved several key objectives across its operations. The company’s CEO, Alberto Calderon, attributed the successful year to the right operating model and people in place, which allowed the company to deliver on its production and cost commitments to the market.
One of the company’s most notable achievements was an 11% increase in gold production to 2.742Moz in 2022, up from 2.472Moz the previous year, which exceeded its guidance range. This improvement was underpinned by solid performances across most of the portfolio, including the Obuasi gold mine in Ghana, which met its targeted production of 250,000oz. The mine is on a ramp-up path to reach full production run-rate in excess of 400,000oz by the end of 2024.
Furthermore, AngloGold Ashanti’s exploration success continued, adding 12.2Moz of mineral reserves during the year, pre-depletion. This marks the sixth consecutive year the company has achieved a positive net outcome, which demonstrates its commitment to extending the life of its existing mines while developing new ones.
Despite the challenging environment of the highest inflation rates in over forty years, the company managed to limit cost increases to around half the inflation rate. The company’s total cash costs per ounce increased 6% to $1,024/oz for 2022 compared to $963/oz for 2021, while the increase in all-in sustaining costs was limited to only 2% year-on-year to $1,383/oz in 2022 from $1,355/oz in 2021. The company met its guidance for total capital expenditure and all-in sustaining costs, while total cash costs ended less than 1% above the guidance range. This is a significant achievement given the challenges of high inflation and volatile commodity prices.
AngloGold Ashanti’s safety performance was another highlight of the year, with a Total Recordable Injury Frequency Rate (TRIFR) of 1.26 injuries per million hours worked in 2022, a significant improvement compared to 2021. The TRIFR remains far better than the average performance of 2.90 injuries per million hours worked by the members of the International Council on Metals and Minerals. The company recorded no fatalities during the year, marking the second time in its history.
Adjusted EBITDA was marginally lower at $1.797bn in 2022 compared to $1.801bn in 2021. However, the company recorded free cash flow of $657m in 2022, a significant improvement from $104m in 2021. The company’s balance sheet remained in a solid position after funding capital expenditure, two property acquisitions in Nevada, and paying an interim dividend. It ended the year with approximately $2.5bn in liquidity, including cash and cash equivalents of $1.1bn.
The company’s success in 2022 can be attributed to the implementation of its strategic objectives, including the introduction of new members to its senior leadership team and the redesign of its operating model, which narrowed the cost gap with peers. The company has also started an asset optimization program while self-funding its successful exploration programs and developing mining projects in Ghana and Nevada.
Looking forward, AngloGold Ashanti is well-positioned to continue its growth trajectory and capitalize on its successes in 2022. The company’s solid balance sheet and financial position, combined with its ongoing exploration success and operational improvements, provide a strong foundation for future growth.
