AngloGold loses 74,000oz during third quarter

World number three miner AngloGold Ashanti reported strong third quarter free cash flows of $161 million despite a steep drop in output compared to last year.

Production in the third quarter was 900,000oz compared to 974,000oz in the third quarter of last year the company said in a statement. 2015 results included a combined 32,000oz from Cripple Creek & Victor (sold to US-based Newmont Mining) and Obuasi in West Africa which was put under care and maintenance.

Costs have also been rising with all-in sustaining costs up 14% year on year to $1,071/oz which the Johannesburg-based company says "reflects the increase in total cash costs, exploration, corporate and marketing costs and a planned increase in capital expenditure."

The production outlook for 2016 have been narrowed at the lower end of previous guidance with Anglo-Gold now expecting to produce between 3.6moz and 3.65moz for the full year.

All-in costs are also forecast to come in at the higher end to between $980/oz and $1,010/oz compared to $900/oz and $960/oz earlier guidance. Capital expenditure has been narrowed to between $790m and $820m, from $790m to $850m previously according to the statement.

The company said production from the South African mines which dipped 7% to 235,000oz, "continues to be affected by safety-related stoppages, predominantly those under Section 54 of the Mine Health and Safety Act". Fatalities at AngloGold's ultra-deep mines in the African country rose to seven this year.

Bloomberg quotes Chief Executive Officer Srinivasan Venkatakrishnan as saying that authorities in South Africa "is overly zealous in closing entire operations, even for minor infractions. As such, the company is considering building such shutdowns into its outlook forecasts."