November 9, 2011 / 6:31 AM / 6 years ago

REFILE-UPDATE 2-AngloGold Q3 earnings beat forecast

(Refiles to correct format for dateline)

* Record adjusted headline earnings beat forecast

* Historic peaks for gold price key driver

* CEO says will not borrow to fund dividends

* 2011 output forecast lowered slightly to 4.33 mln oz (Recasts with analyst, CEO, updates share price)

By Ed Stoddard

JOHANNESBURG, NOV 9 (Reuters) - AngloGold Ashanti , the world No. 3 gold miner, reported record-breaking third-quarter earnings on Wednesday, beating forecasts as bullion's bull run filled its coffers.

The average gold price was up about 13 percent to just over $1,700 an ounce during the quarter to the end of September compared to the previous one.

This trend flowed smoothly to the bottom line of the global miner, which said it was now moving to quarterly dividends and declared one of 90 South African cents.

Chief executive Mark Cutifani said in a conference call the group expected to turn in another strong fourth quarter on the gold price as he stuck to forecasts he gave in September that it could target $2,200 an ounce in 2012.

He also said group would cover its dividends from cash flows and not borrow to fund them or tie the policy to the gold price, though analysts said timely payments to shareholders would ultimately depend on bullion's performance.

"They should be able to make regular dividend payments with a continuous upward trend in the gold price," said David Davis, mining investment analyst with SBG Securities in Johannesburg.

Cutifani also said the group would generate enough cash to fund its growth projects and remained on track to lift output to a forecast 5.5 million ounces by 2014.

The target for 2011 was revised down slightly to 4.33 million ounces because of increased safety stoppages in South Africa and a slow ramp-up at the Sunrise Dam mine in Australia, where output earlier this year was negatively impacted by heavy rains.

Cutifani said increase in output should kick in 2013 depending on the timing of commissionings and projects.

Davis noted that these commitments were substantial but saw them really lifting and sustaining production beyond 2015.

"They have a significant growth programme. They have seven board-approved projects right now which is around $1.3 billion and that should increase their output by 800,000 ounces in the next 2 to 3 years," Davis said.

WEAK CURRENCIES, GLOWING GOLD

AngloGold gets about 40 percent of its output from South Africa and has a Latin American presence. Regional currency weakness against the dollar -- which spot gold is priced in -- also helped to boost margins. The rand/gold price for example was up about 20 percent in the quarter.

Adjusted headline earnings per share rose 25 percent to 118 U.S. cents in the July-September period from 89 cents in the previous quarter. This beat a Reuters poll of six analysts which had forecast a result of 113.4 U.S. cents.

In total, the group said adjusted headline earnings were a record $457 million.

AngloGold's share price was down 0.85 percent in morning trade, in line with its peers, as the spot price eased further off Tuesday's high of $1,802.60 an ounce. It was fetching $1,783.84 at 0818 GMT.

In the year to date its share price is up just over 16 percent, lagging an almost 20 percent increase in the Johannesburg bourse's gold mining index . (Editing by Marius Bosch and Andrew Callus)

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