September 2018 Market update report - www.AngloGoldAshanti.com
4
Operating Highlights
The Americas region produced 192,000oz at a total cash cost of $607/oz for the third quarter of 2018 compared to 213,000oz at a total cash
cost of $673/oz in the third quarter of 2017. AISC was $817/oz for the third quarter of 2018, compared to $989/oz in the third quarter of 2017.
In Brazil, production was 121,000oz at a total cash cost of $687/oz for the third quarter of 2018, compared to 142,000oz at a total cash cost
of $715/oz in the third quarter of 2017. AISC was $916/oz for the third quarter of 2018, compared to $1,060/oz in the third quarter of 2017.
Production from AngloGold Ashanti Mineração was lower year-on-year, mainly due to lower grades and reduced volumes mined at Cuiabá
and Córrego do Sítio (CdS). At
Cuiabá, p
roduction was impacted by lower feed grades and changes in the mine plan, while at CdS, output
was impacted by delays in environmental licensing as well variances in the geological model. A daily compliance tracking process has been
implemented to monitor and reduce deviations to the revised plan.
Total cash costs were impacted by lower production and some cost escalations, partially compensated by cost management initiatives, new
shift configurations and favourable exchange rate effects during the quarter.
At Serra Grande, production for the third quarter of 2018 improved to 34,000oz at a total cash cost of $587/oz, compared to 30,000oz at a
total cash cost of $799/oz for the third quarter of 2017. Production is reflective of higher feed grades and recoveries due to improved performance
in crushing, milling and leaching areas. There were temporary delays in receiving an environmental license, waste dump permits and
commencement of operations in the new open pit.
In Argentina, Cerro Vanguardia's production was maintained at 71,000oz, while total cash costs improved by 19%, to $456/oz for the third
quarter of 2018, compared to $566/oz in the third quarter of 2017. Production was impacted by variability in the mining model while higher
tonnes treated were offset by lower tonnes placed in the heap leach. Silver production increased 28% year-on-year, in line with the mine plan.
Total cash costs were 19% lower compared to the third quarter of 2017, mainly as a result of the devaluation of the Argentinian peso against
the US dollar. In addition, favourable efficiencies were derived mainly from lower consumption of the fuel, services and consumables, as well
as lower heap leach costs given fewer tonnages. Unfavourable stockpile movements, caused by lower tonnes mined and higher tonnes treated,
had a negative impact on costs, which was in addition to the inflationary impact on payroll costs.
The Continental Africa region produced 391,000oz at a total cash cost of $718/oz for the third quarter of 2018, compared to 380,000oz at a
total cash cost of $696/oz in the third quarter of 2017. AISC was $834/oz for the third quarter of 2018, compared to $946/oz in the third quarter
of 2017. Production increased due to the increased production at the Kibali mine by 55% and 10% from Iduapriem, more than offsetting the
decrease in production at Siguiri by 35%.
In the DRC, Kibali produced an attributable 101,000oz at a total cash cost of $510/oz for the third quarter of 2018, compared to 65,000oz at
a total cash cost of $781/oz in the third quarter of 2017. Production increased given higher underground tonnage treated and a one-third
increase in overall grades. Total cash cost decreased by 35% mainly due to higher production, partly offset by inflationary increases and the
increased royalties implemented through the new mining code.
Kibali is on track to exceed its production guidance of 730,000oz for the year, as the operation has met or exceeded designed capacity on
throughput, recovery and hoisting capacity. Kibali has also reached an agreement with the Ministry of Finance on the reimbursement of
outstanding TVA (value added tax), which amounts to $218m in total. The agreement allows for $40m to be paid up-front, while the balance
will be settled on an offset basis. The Ministry has also agreed to exempt local goods and services purchased by Kibali, from TVA.
In Ghana, Iduapriem produced 64,000oz at a total cash cost of $827/oz for the third quarter of 2018, compared to 58,000oz at a total cash
cost of $786/oz for the third quarter of 2017. Production increased by 10% as a result of an 8% increase in recovered grade, due to mining of
marginally higher ore-grade areas and higher recovery in the current period. There was also an increase in tonnage treated, due to continued
improvements in plant reliability and utilisation. Total cash costs, however, increased by 5% mainly due to the higher fuel price, and an increase
in mining costs.
At Obuasi the redevelopment project for recommencing operations continues, with the commencement of production on schedule for the end
of next year.
In Tanzania, Geita produced 151,000oz at a total cash cost of $735/oz for the third quarter of 2018, compared to 152,000oz at a total cash
cost of $586/oz in the third quarter of 2017. A 10% increase in recovered grade, due to higher grade ore from Nyankanga Cut 8 pit and continued
improvements in underground operations, was offset by a 10% decrease in tonnes treated mainly as a result of operational challenges
experienced during the period, including unplanned downtime to repair the ball mill end-plate and primary crusher. Total cash costs increased
due to the higher operational underground mining costs relative to open pit, as well as higher stripping costs, elevated fuel prices, inflationary
pressures and the additional royalties and clearance fees.
In Guinea, Siguiri produced 54,000oz at a total cash cost of $823/oz for the third quarter of 2018, compared to 83,000oz at a total cash cost
of $704/oz in the third quarter of 2017. The mine saw a 26% decrease in tonnes treated and lower recoveries due to limited flexibility experienced
during plant stoppages following the integration of the Carbon-In Leach commissioning. Additionally, production was impacted by a 12%
decrease in recovered grade due to treatment of lower-grade stockpiles from the Kozan and Bidini pits, compared to the same period a year
ago when the high-grade Seguelen pit was more prevalent. Total cash costs were higher year-on-year mainly due to the decline in production.
This was partly offset by lower mining activity costs from mining lower volumes and shorter haulage distances, operational excellence initiatives,
and favourable movement in ore stockpiles.
In Mali, Sadiola produced 14,000oz at a total cash cost of $912/oz for the third quarter of 2018, compared to 15,000oz at a total cash cost of
$902/oz in the third quarter of 2017. Production dropped 7% year-on-year primarily due to lower recovered grades. Total cash costs per ounce
produced for the third quarter of 2018 were higher compared to the third quarter of 2017 as a result of greater drawdowns of ore stockpiles.
All-in sustaining costs per ounce sold for the third quarter of 2018 were lower compared to the third quarter of 2017 as a result of lower sustaining