Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
South Africa-based gold miner AngloGold Ashanti has begun a complete review of its assets, its CEO said on Tuesday, in a bid to bridge the gap in performance of its mines compared with rivals.
The miner, with operations across Africa, Australia and Latin America, reported a 38.66% drop in profit for 2021 and forecast higher gold production this year, but said inflationary pressures were likely to be a key risk to earnings.
The Johannesburg Stock Exchange-listed company is among the world’s top three miners of gold but its shares usually trade at a discount to global peers such as Newmont Corp. or Barrick Gold due to its lower reserves, the shorter life of its mines and higher costs of production.
Alberto Calderon, who took over as CEO in September, has called the costs of the company “unacceptable and uncompetitive”.
He started off with a structural overhaul, cutting redundant staff, increasing efficiency at operating sites and appointing new management across all operations.
“Now we have to move to ensuring that our assets are close to their full potential,” Calderon told Reuters in an interview.
AngloGold will undertake detailed analysis of each asset, including mine design and key operating parameters, and identify areas of increasing performance over the next two years, Calderon said, adding the company would share specific targets at the end of 2022.
He wants to bring down the all-in sustaining cost (AISC) — a metric to measure overall gold production cost of miners — to around $1,100 per ounce from the current $1,300 ounce.
“We are confident that we can make a step change, not a small change,” Calderon said, adding that once it reaches its cost target, it would be in a “very good group” when compared with rivals.
The company posted an AISC of $1,355 per ounce, up from $1,037 per ounce a year ago. Its Canadian rival Barrick Gold reported a full-year AISC of $1,026 per ounce last week.
(By Promit Mukherjee and Nelson Banya; Editing by Clarence Fernandez, Uttaresh.V, Kim Coghill and Ed Osmond)
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