AngloGold lowers FY production guidance

Gold miner's Q2 production meets target, flags $US2.2bn services writedown.

AngloGold Ashanti Ltd has lowered its guidance on full-year production and second-quarter earnings despite unveiling second-quarter production in line with expectations.

In a statement to the Australian Securities Exchange, AngloGold said it produced 935,000 ounces of gold in the second quarter at a total cash cost of between $US900 and $US920 ($994 to $1016)  per ounce.

The results were in line with market guidance of 900,000 to 950,000 ounces at a cost between $US900 and $US950 per ounce.

However, AngloGold lowered its full-year guidance for 2013 to between 4 million and 4.1 million ounces, from between 4.1 million and 4.4 million ounces.

The world's third-largest gold miner also warned a drop in the gold price would hit its second-quarter earnings, due out next month.

The company flagged a $US2.2 billion to $US2.6 billion post-tax writedown on its mining assets.

"It’s been a strong performance in a challenging environment," chief executive Srinivasan Venkatakrishnan said.

"In light of the $US220 per ounce drop in the average quarterly gold price which will negatively impact our second quarter results, we’ve moved decisively on all fronts to sharpen our focus on efficiency and to tighten up on costs, overheads and capital" (see Clifford Bennett's The aggressive play is gold).

The South African company has two new mines in development in Australia and the Democratic Republic of Congo, expected to add 550,000 to 600,000 ounces at a lower cash cost than the current average in 2014.

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