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AngloGold Ashanti reported first quarter headline earnings of US$203 million, driven by the higher gold price, as the Company continued its reinvestment programme aimed at completing the redevelopment of the Obuasi gold mine and adding new gold reserves across its portfolio.

Headline earnings of US$203 million, or 48 cents a share in the three months to the end of March 2021, compare to US$143 million, or 34 US cents per share, in the first quarter of 2020.

Adjusted net debt declined by 43% year-on-year to US$908 million in the first quarter of 2021 from US$1,606 million in the first quarter of 2020.

“We continue to make progress in delivering on our strategy,” Christine Ramon, interim chief executive officer said.

Ramon added, “Our balance sheet remains in a solid position and Obuasi is making steady progress to completion.”

In a statement, AngloGold said “This year and next will be key investment years for AngloGold Ashanti as it increases production from brownfields projects and builds on strong reserve additions from exploration in 2020, to increase its overall reserve base and the life of its mines.”

The company currently expects to meet its guidance for 2021. Construction at the Obuasi Redevelopment Project, which will transform the 20Moz highgrade gold ore body, initially placed on care and maintenance in 2016, into a top-tier gold producer, achieved 97% completion by the end of March this year.

Production from the mine rose 53% to 46,000oz in the first quarter of 2021, from 30,000oz the prior quarter. Production for the first quarter of 2021 was 588,000oz at a total cash cost of US$999/oz, compared with 630,000oz at a total cash cost of US$773/oz from continuing operations in the same period in 2020.

Solid production performances at AGA Mineração, Serra Grande, Siguiri and Obuasi were offset by declines at other mines in the portfolio. In the first quarter of 2021, COVID-19 accounted for an estimated 4,000oz of lost production and an estimated US$29/oz of all-in sustaining costs.

The Brazilian operations and Obuasi mine were most affected by the pandemic during the first quarter, with high rates of absenteeism affecting productivity in Brazil and ongoing challenges encountered in the rotation of expatriate workers from Australia to Ghana.

In the first quarter of 2021, total cash costs increased mainly as a result of lower grades and the drawing down on ore stockpiles at some of the operations while waste stripping and underground development progressed, as well as inflationary pressures recorded across most of the portfolio.

This increase was partly offset by operating efficiencies. AISC rose by 26%, or US$266/oz, to US$1,287/oz in the first quarter of 2021, compared to US$1,021/oz from continuing operations in the first quarter of 2020.

The primary driver of production growth over the next two years are Obuasi operating at steady state, Tropicana reverting to normalised production levels following the current reinvestment in its life extension, and planned production gains from AGA Mineração, Siguiri and Sunrise Dam.