AngloGold plunges 9% after ‘disappointing’ Q3 production, especially at Obuasi (NYSE:AU)

AngloGold Ashanti (NYSE:AU) -8.9% in Thursday’s trading after reporting Q3 gold production rose 3% Q/Q to 673K oz and reaffirming full-year production guidance.

However, YTD gold production was lower than in the same nine months of 2022, with 1.91M oz compared to 1.97M oz.

RBC Capital’s analysts said the Q3 production results were disappointing, with particular concerns around the Obuasi mine in Ghana, where output dropped 36% Y/Y to 46K oz and experienced a fall of ground incident in August.

The analysts cautioned that a prior fall of ground incident in May 2021 resulted in a fatality and more than two quarters of suspended production.

The company said it would change its mining method at Obuasi to a cut and fill method to account for the ground conditions.

For the full year, AngloGold (AU) reiterated its gold production target of 2.45M-2.61M oz – which it adjusted lower in February – with all-in sustaining costs of $1,405-$1,450/oz.