Outlook

Production in the September quarter was negatively impacted by the following:

  • unlawful strike action at KDC and Beatrix which resulted in a loss of 35,000 ounces;
  • the fire at KDC which reduced production by approximately 30,000 ounces; and
  • the temporary suspension of the heap leach facilities at Tarkwa which resulted in a loss of 15,000 ounces.

As a result of the factors described above, and further lost production at KDC and Beatrix due to the prolonged illegal strike which was finally resolved on the 6 November, attributable gold production for the year ending December 2012 is expected to be no more than 3.3 million equivalent ounces.

For the year ending December 2012, total cash cost is estimated to be approximately 4 per cent higher at US$895 per ounce (R236,000 per kilogram) and NCE, excluding capitalised growth projects, is estimated to be approximately 5 per cent higher at US$1,370 per ounce (R360,000 per kilogram) when compared with the guidance provided in February. The capital projects group is anticipating spending approximately US$20 per ounce on realisation costs of projects, including drilling, feasibility studies and early-work capital expenditure on our advanced projects. This is well below the original estimate of between US$50 per ounce and US$70 per ounce due to the timing of expenditure and deferrals to ensure project optimisation. These estimates are based on an average exchange rate of R/US$8.80 and R/A$9.10 for the remainder of the year. Unit costs vary quarter on quarter depending upon the timing of capital expenditure, seasonal electricity tariffs and production variations due to statutory holidays.

The above is subject to safety performance which limits the impact of safety-related stoppages and the forward looking statement.