AngloGold Ashanti Ltd. (NYSE:AU) Q2 2020 Earnings Conference Call - Final Transcript
Aug 07, 2020 • 09:00 am ET
Good day, ladies and gentlemen, and welcome to AngloGold Ashanti's 2020 Mid-year Results Presentation. [Operator Instructions]
I'd now hand the conference over to Mr. Stewart Bailey. Please go ahead, sir.
Thanks, Judith, and welcome, everybody to our first half results conference call. Thanks for making the time. You have Kelvin, Christine, Ludwig, Sicelo and Graham on the call to run you through all aspects of the business and our performance for the first half.
Before we start, as usual, I would like to direct you to the safe harbor statements at the front of the presentation, which contains important information, particularly about forward-looking statements that may be made. I do urge you all to read it, if you have -- when you have a moment.
Without any further ado, I'm going to hand over to Kelvin. Kelvin?
Well, thank you very much, Stewart, and welcome everyone. To start, our overall objective is to safely deliver better quality production aimed at widening margins, extending mine lives, and improving the portfolio. The current health crisis does not change that. We're committed to maintaining discipline in the current gold price environment, with emphasis on further deleveraging the balance sheet, progressing the ongoing divestment processes, enhancing margins, growing oil reserves and ramping up Obuasi to commercial production. And importantly, we will work to maintain and strengthen our license to operate through effective ESG practices, as demonstrated in our ability to mobilize quickly and effectively to support the global fight against the COVID-19 pandemic.
On the safety front, regrettably, there was one fatality in the second quarter which occurred at Obuasi. An employee was fatally injured in a heavy mobile equipment related incident. And then subsequent to the quarter's close, a security guard from Obuasi passed away on July 8 as a result of injury sustained in a light vehicle accident. These incidents were difficult for us and hard reminders of the incredible work and attention required to achieve zero harm at our operations. We're going to intensify our efforts to eliminate injury from the workplace, maintaining our safe production strategy, which aims toward our overall goal of zero harm.
The Company delivered a solid production and financial performance for the first half of the year. The performance was supported by an especially strong second quarter at Geita, Serra Grande as well as steady production from Kibali, Iduapriem, Tropicana and AGA Mineracao. It's pleasing to report production improvement quarter-on-quarter at Sunrise Dam, Siguiri and Cerro Vanguardia. Obuasi redevelopment project continue to ramp up, delivering a 63% quarter-on-quarter increase in production, despite COVID-19-related delays.
COVID-19-related stoppages overall impacted about 85,000 ounces of production during H1, predominantly in South Africa. All-in sustaining costs rose 3% year-on-year to $1,031 per ounce, of which, $52 per ounce was related to the COVID-19 impacts. All-in sustaining costs would have been sub-$1,000 an ounce, if it weren't for that.
Cash flow was robust, demonstrating significant leverage to the rising gold price. Free cash flow before growth capital, the metric on which our