"We are building on the momentum we established in 2013 with strong cost and production performance in the first quarter of 2014," said Gary Goldberg, President and Chief Executive Officer. "Our team drove down all-in sustaining costs by $82 million compared to the prior year quarter through sustainable cost and efficiency improvements. We are also delivering on our commitment to improve mining fundamentals, which led to a 40 percent increase in gold production at Tanami compared to the prior year quarter. We are confident we can maintain this trajectory as the year progresses, as evidenced by our updated outlook for lower costs and higher production for Africa."
Highlights for the first quarter
Achieved reported net income attributable to shareholders from continuing operations of $117 million, or $0.23 per basic share, and adjusted net income1 of $108 million, or $0.22 per basic share;
Generated cash from continuing operations of $183 million;
Generated cost savings of $82 million in gold all-in sustaining costs2 ("AISC"), which equates to $1,034 per ounce, down 8 percent from the prior year quarter;
Realized costs applicable to sales ("CAS") of $751 per ounce of gold and $2.71 per pound of copper, a decrease of 1 percent and an increase of 19 percent, respectively, over first quarter last year;
Delivered 1.2 million ounces and 24 thousand tonnes of attributable gold and copper production, with higher gold production coming from our Australia/New Zealand and Africa operations;
Improved AISC outlook3 by 13 percent, and production outlook by 2 percent in Africa; and
Declared a second quarter dividend of $0.025 per share in accordance with the Company’s gold price-linked dividend policy4.
First Quarter Financial Results
The Company reported attributable net income from continuing operations of $117 million, or $0.23 per basic share, compared with $314 million, or $0.63 per share in 2013. The Company reported adjusted net income of $108 million, or $0.22 per basic share, compared with $353 million, or $0.70 per basic share a year earlier. Improved production and stable operating costs relative to the prior year quarter were offset by declines in average realized gold and copper prices of approximately 21 percent and 20 percent, respectively. Reduced spending on exploration, advanced projects, and sustaining capital also led to $82 million in lower gold AISC this quarter.
Summary of first quarter 2014 financial results compared with 2013:
Generated revenue of $1.8 billion compared with $2.2 billion in 2013;
Gold and copper AISC of $1,034 per ounce and $3.67 per pound, respectively, compared with $1,121 per ounce and $3.38 per pound, respectively;
Average realized gold and copper price of $1,293 per ounce and $2.50 per pound, respectively, compared with $1,631 per ounce and $3.12 per pound, respectively;
Gold and copper CAS of $751 per ounce and $2.71 per pound, respectively, compared with $760 per ounce and $2.27 per pound, respectively; and
Cash flow from continuing operations of $183 million compared with $439 million.
Attributable gold production increased approximately 4 percent from 2013 levels due to production from the new Akyem operation, as well as higher production from Australian operations, partially offset by lower production from Peru as a result of the planned stripping campaign at Yanacocha. Attributable copper tonnes produced were 20 percent higher with the contribution from the Phoenix Copper Leach operation in Nevada. Gold CAS remained stable over last year. Gold AISC was reduced by 8 percent, primarily due to cost and efficiency improvements.
