Operational Review (six months ended 31 December 2010)
Group attributable gold production for
the six months ended 31 December
2010 was similar to the six months
ended December 2009, at 1.8
million ounces. This is in line with the
operational guidance provided in
August 2010.
At the Australasian operations, gold
production increased by 12% from
289,000 ounces in the six months
ended December 2009 to 323,000
ounces in the six months ended
December 2010. St Ives increased
production by 24% from 196,000
ounces to 243,000 ounces – mainly
due to increased tonnes processed
at a higher head grade. Production at
Agnew decreased by 14% from 93,000
ounces to 80,000 ounces, mostly
due to restricted underground stope
access at Kim South.
At the South African operations, gold
production decreased from 1,050,000
ounces to 982,000 ounces. At KDC,
gold production declined from 695,000
ounces to 634,000 ounces due to
a decrease in volumes mined as a
result of safety stoppages and the
replacement of a water pump column.
At Beatrix, gold production dropped
by 7% from 217,000 ounces to
202,000 ounces, while at South Deep
gold output rose by 7% from 137,000
ounces to 146,000 ounces in line with
the build-up plan.
In South America, managed gold
equivalent production at Cerro Corona
increased from 187,000 ounces in the
six months ended 31 December 2009
to 200,000 ounces in the six months
ended 31 December 2010, due to
higher mined and processed volumes.
At the West African operations, total
managed gold production increased
from 445,000 ounces for the six months
ended December 2009 to 479,000
ounces for the six months ended
December 2010. At Damang, gold
production increased by 21% from
97,000 ounces to 117,000 ounces,
despite a 13 day plant shutdown in
December 2009. The increase in
production was mainly due to the
commissioning of the secondary
crusher during the prior period.
Tarkwa’s production increased from
348,000 ounces to 362,000 ounces
largely due to an increase in Carbon-In-
Leach (CIL) throughput.
Group revenue increased by 18% from
R15.48 billion (US$2.0 billion) for the
six months ended December 2009 to
R18.3 billion (US$2.6 billion) for the
six months ended December 2010.
The 15% higher average gold price
at R296,545 per kilogram (US$1,292
per ounce) compares with R252,464
per kilogram (US$1,026 per ounce)
achieved for the six months ended
31 December 2009. Operating costs,
including gold-in-process movements,
increased by 10% from R9.2 billion
(US$1.2 billion) to R10.2 billion
(US$1.4 billion). This was mainly due to:
- Annual wage increases at all of
our operations
- Higher electricity costs at our South
African and Ghanaian operations
due to tariff hikes
- Normal inflationary increases
Total cash costs for the Group rose
by 11% from R147,495 per kilogram
(US$600 per ounce) to R163,416
per kilogram (US$712 per ounce).
This was a result of the increase in
operating costs mentioned above,
as well as new royalty payments in
South Africa.
At our Australian mines, operating
costs, including gold-in-process
movements, rose by 9% from
A$212 million (US$184 million) to
A$232 million (US$218 million) due
to increased production, escalating
deferred waste charges and increased
grade control drilling at St Ives. At
Agnew, the increase in costs was
mainly due to costs incurred on
the rehabilitation of poor ground
conditions at Kim South.
At our South African operations,
operating costs increased by 8% from
R5.6 billion (US$728 million) for the six
months ended 31 December 2009 to
R6.0 billion (US$846 million) for the six
months ended 31 December 2010.
This was due to annual wage hikes,
a 27.5% surge in electricity costs
and normal inflationary increases
in stores and contractor payments,
partially offset by cost saving initiatives
implemented during the year.
In South America, operating costs at
Cerro Corona increased from US$67
million to US$76 million, mainly due
to higher production and increased
statutory workers participation in
profits because of improved earnings.
At our West African operations,
operating costs, including gold-inprocess
movements, increased from
US$226 million to US$282 million, as
a result of higher mining volumes and
power costs.
Total Group operating profit increased
from R6.3 billion (US$819 million) to
R8.2 billion (US$1.1 billion).
In line with our policy to pay out 50%
of earnings before taking account
of investment opportunities and
after excluding impairments, a final
dividend of R0.70 per share has been
paid for the six months ended
31 December 2010.
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