By Ron Derby Feb. 17 (Bloomberg) -- AngloGold Ashanti Ltd., Africa’s largest producer of the metal, returned to profit in the fourth- quarter after partially reversing some asset impairments and as bullion prices and output rose. Net income was 3.18 billion rand ($415 million) for the three months through December, compared with a loss of 8.25 billion-rand the previous quarter, the Johannesburg-based company said in a statement today. “Two key components of this change were the partial reversal of asset impairments,” AngloGold said. AngloGold’s South American unit, with mines in Argentina and Brazil, increased output 8 percent, while production from its African operations rose 3 percent, it said. Gold production climbed to 1.182 million ounces during the quarter, ahead of previous guidance of 1.16 million ounces. AngloGold forecast output of between 4.5 million ounces and 4.7 million ounces for the current year. South African gold analysts compare earnings with the previous quarter instead of the year-earlier period. AngloGold reduced forward sales, which committed the company to sell bullion for less than current prices, to 3.9 million ounces during the quarter. The company has been reducing the size of its hedge book so shareholders can benefit from gold’s rally. The metal for immediate delivery gained 24 percent in 2009, advancing for a ninth year, as near-zero interest rates in the U.S. weighed on the dollar. ‘Increase Our Exposure’ “We will continue to look for the right opportunities to increase our exposure to the gold price,” Chief Executive Officer Mark Cutifani said in today’s statement. AngloGold has gained 22 percent in the past year as smaller competitors Gold Fields Ltd. and Harmony Gold Mining Co. gained 6.6 percent and fell 22 percent, respectively. Immediate-delivery gold’s climb in 2009 was less than the rand’s 28 percent gain against the dollar. AngloGold, Gold Fields and Harmony sell the metal for dollars and pay wages and other costs mostly in the South African currency. Sustained currency strength in Brazil, Australia and South Africa “continued to erode the benefit of a higher dollar gold price,” the company said. Gold producers in the South Africa have sought to boost output to mitigate cost increases. Expenses have climbed as companies dig deeper into the earth to mine shrinking reserves. AngloGold, whose main shareholder is hedge-fund firm Paulson & Co., produced about 1.44 million pounds of uranium, a byproduct of gold mining. To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net

Source