Shares of AngloGold Ashanti Ltd. (AU, Financial) fell nearly 3% after the miner reported disappointing first-quarter 2017 results on May 8.Â
The company reported a 17% year-over-year decrease in its adjusted EBITDA of $314 million. In the prior-year quarter, the South African miner reported adjusted EBITDA of $378 million.
The company says net debt was $2.05 billion at the end of the first quarter and has  $1.46 billion in liquidity.
The miner's first-quarter production was 830,000 ounces of gold at a total cash cost of $813 per ounce. This is down from 861,000 ounces of gold in first-quarter 2016. Furthermore, the overall costs were worse compared to cash costs of $702 per ounce of gold sustained by the company in the first quarter of 2016. The company attributes the increase in costs to lower grades and stronger currencies in key operating regions.
In regard to its South African operations during the quarter, production at Vaal River declined 17.8% year over year to 74,000 ounces of gold. At West Wits, production fell 20.6% to 77,000 ounces of gold. The company also produced fewer ounces of gold from total surface operations: 43,000 ounces of gold in first-quarter 2017 versus 47,000 ounces of gold in first-quarter 2016. Total cash costs per ounce of gold were $1,158, up from $786 per ounce in the prior-year quarter.
From its international operations, AngloGold Ashanti produced 632,000 ounces of gold during the first quarter, up 1.12% year over year. The miner says the increase reflects solid performances at its Siguiri, Iduapriem, Kibali and Cerro Vanguardia mines. The miner sustained cash costs of $714 per ounce of gold, a 5.9% increase year over year due to stronger local currencies against the U.S. dollar, lower average grades of ore processed and higher sustaining capital expenditures than initially planned.
Internationally, AngloGold reported increased production at its operations in Democratic Republic of Congo (up 6.8%; 63,000 ounces of gold), Ghana (up 6.5%; 49,000 ounces of gold), Guinea (up 21%; 75,000 ounces of gold) and Australasia (up 2.4%; 127,000 ounces of gold). The miner reported decreased production at its operations in Mali (down 15.8%; 16,000 ounces of gold), Tanzania (down 7%; 105,000 ounces of gold) and in the Americas (down 2.6%; 192,000 ounces of gold).
During the quarter, the company spent $186 million to maintain ongoing operations at its mines and spent approximately $30 million to develop projects. Total capital expenditures for the quarter amounted to $216 million, up by $88 million from the comparable quarter of 2016. For the remainder of the year, AngloGold expects capital expenditures to increased based on past seasonal trends.
The all-in sustaining cost per ounce of gold was $1,060 in the first quarter, an increase from an AISC of $860 per ounce in the first quarter of 2016.
The company says improvements at its operations will increase productivity, so gold production is expected to recover in the second half of the year.
For full-year 2017, AngloGold Ashanti expects production to be 3.6 million ounces to 3.75 million ounces of gold at an AISC of $1,050 per ounce to $1,100 per ounce and cash costs per ounce to be of $750 to $800.
Disclosure: I have no positions in AngloGold Ashanti.
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