AngloGold Ashanti shares lower, Newsline

JOHANNESBURG – AngloGold Ashanti’s share price fell as much as 2.07percent to R436.51 in intraday trade yesterday as commodity market stocks took a pounding on the JSE and despite the gold mining producer reinstating its annual production guidance of between 3.03million ounces and 3.10million ounces on increasing certainty.

The share closed 1.35percent lower at R439.72.

AngloGold Ashanti yesterday reinstated its guidance on growing certainty as most of its global assets are set to brave the impact of the Covid-19 storm.

The world’s third-biggest gold producer said that this was also guided by the anticipation of the conclusion of the sale of its South African assets at the end of this month.

AngloGold’s annual guidance on financial and operating metrics was withdrawn on March 27 when many governments ordered some businesses to cease or limit operations as the Covid-19 pandemic accelerated.

The group’s Cerro Vanguardia mine in Argentina, Serra Grande in Brazil and all South African operations were ordered to close for varying periods, while border closures slowed down the Obuasi Redevelopment Project in Ghana.

AngloGold Ashanti said it had benefited from its diversified global portfolio and careful management during the intervening period, with the effect in the first half of the year limited to 85000 ounces, or 3percent of production, and $53 (R865) an ounce, or 5 percent, of the all-in sustaining cost during the period.

Most of the impact on the guidance was related to the South African assets, where the Mponeng mine was ordered to close from March 26 and only resumed production on May 4.

Mponeng was thereafter allowed to ramp up to just 50percent of capacity before it was closed again on May 24 until June 1.

AngloGold’s interim chief executive, Christine Ramon, said the reinstated guidance reflected the group’s greater certainty in relation to full year operating performance.

“Our operators have done an outstanding job managing through this period – limiting the impact of Covid-19 on production and costs, while prioritising the health of our employees and host communities,” Ramon said.

All AngloGold Ashanti’s mines had subsequently returned to full production.

The completion date for the Obuasi project was moved out by three months to the end of the first quarter next year and it remains on track to meet that schedule.

On Monday spot gold opened the day relatively flat at $1952 per ounce before falling 1.79 percent, shaving $34.92 to trade at $1915.99 per ounce in the afternoon.

The JSE gold mining index stocks fell by 2.27 percent to 5219.12 points yesterday, before closing 2.46percent lower at 5232.86 points.

ActivTrades chief analyst Carlo Alberto De Casa said gold stocks were in the red yesterday, as investors feared the global threat of new lockdowns was increasing.

De Casa said gold was not finding any fuel for new rallies and the price was languishing, losing more than $10.

De Casa said technically the scenario was unchanged, with a first support zone placed at $1920, “while we would have a major negative signal with a fall below $1860”.

“Vice versa, a recovery above $2000 could open space for a new jump, with the peak seen in August at $2070 a potential target,” De Casa said.

“Anyway, we should point out that bullion is not jumping despite the risk-off scenario, confirming the positive direct correlation with indices we have seen in the last few months.”

FXTM’s Hussein Sayed said gold was stuck in a narrow range as traders awaited new clues on the Fed’s policy approach towards inflation.