AngloGold Ashanti shares climbed 2% on Friday after CEO Alberto Calderon committed to decrease expenses that had impacted earnings for the first half of the year and moved closer to the upper end of its full-year estimate range.
The South African gold miner‘s first-half output increased by 3% year-over-year to 1.233 million ounces, keeping it on pace to exceed its 2022 output projection of between 2.55 and 2.8 million ounces.
However, headline profits per share, the primary profit metric in South Africa, came in at 71 U.S. cents, 18 percent less than the previous year. As inflation surged, total cash expenditures rose by 6 percent to $1,068 per ounce, but Calderon was pleased that the rise was “contained.”
“We are delighted with what we were able to do,” the CEO told reporters, adding that the majority of its competitors have had “severe cost concerns.”
Calderon stated that the miner can accomplish the necessary decrease in second-half cash costs to keep within the company’s annual cash cost range of $925 to $1015 per ounce.
The largest gold miner in the world, Newmont Corp, upped its annual cost prediction last week and warned that inflationary pressures would continue into next year, causing its shares to decline by 12 percent.
AngloGold Ashanti, which has mines in Argentina, Australia, Brazil, the Democratic Republic of the Congo, Ghana, Guinea, and Tanzania, produced 1.233 million ounces of gold in the first half, a 10 percent increase over the first quarter due to improved grades.
Adjusted net debt decreased by 13% year-over-year to $740 million, while free cash flow came in at $471 million, compared to a $25 million outflow in the first half of last year. This was driven by cash distributions from its Kibali mine in Congo, a joint venture operated by Barrick Gold (NYSE:GOLD) Corp.