By Charlotte Mathews
SA’s three biggest listed gold companies paid down debt and started to pump cash in the first half of the year, while gold prices and local currencies were favourable.
With fatter purses, they may develop an appetite for acquisitions.
AngloGold Ashanti, Gold Fields and Harmony Gold boosted profits in the period to June as strong dollar gold prices were accompanied by weaker currencies in the countries where they own mines, reducing their operating costs.
AngloGold has reduced its net debt to US$2.1bn from $3.1bn over the past year and its net debt to adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) was at 1.44 times by end-June, well below its bank covenants of 3.5 times.
AngloGold had $1.8bn of undrawn facilities at end-June.
AngloGold’s SA and African mines together accounted for two-thirds of total production of 1.745moz in the six months to June, when its all-in sustaining cost (AISC) was $911/oz. It generated $108m of free cash against $31m last year.
Gold Fields’ net debt fell to $1.16bn at the end of June, from $1.4bn at end-December. It recently refinanced its credit facilities, which are now $1.3bn, with a maturity of June 2019. Its net debt: Ebitda ratio was 1.05:1 and it expected to be at its target of 1:1 by year-end. It generated $60m of cash in the six-month period, compared with only $1m in the same period last year.
The highlight for Gold Fields was a solid performance from the long-troublesome South Deep mine in SA, which contributed 140,000oz to total group production of 1.04moz in the six months.