AngloGold Ashanti

(AU) - Get Report

, the South African mining concern, saw production decline in its first quarter after accidents that killed two workers forced a three-day shut down of its entire South African division.

Though the company led its first-quarter earnings release with assurances that safety has improved, four workers have already died in the company's second quarter.

"Safety remains the company's top priority," AngloGold said in a statement, "and operational management continued to make good progress on all fronts during the past year, recording the lowest ever number of lost-time injuries and a 58% decline in the fatality injury frequency rate. Regrettably, the second quarter thus far has been disappointing with four fatalities."

In other news, the company profited from its decision a year ago, along with the rest of the industry, to reduce its hedge book -- in which it takes short positions with forward sales contracts. As gold prices have increased -- up 14% in the quarter from a year ago -- those hedges would have lost money, cutting into the company's profit margins.

As it stands, AngloGold said, it turned in adjusted earnings of $150 million, or 42 cents a share. A year ago, the company was in the red, losing 17 million, or 5 cents a share.

The company cut its hedge positions to 5.84 million ounces of gold, down 50% from a year ago.

Gold production fell 13% to 1.1 million ounces compared with the year-ago period. AngloGold blamed the falloff on the shutdowns for safety after the deadly accidents and to do maintenance work.

AngloGold is the third largest gold producer in the world. Based in Johannesburg, it operates mines in South Africa, Tanzania, Ghana and Guinea, one of the poorest countries on earth, where the new self-appointed leader has been causing problems for AngloGold. He shuttered one of the company's mines for five days in March after an executive didn't show up for a meeting, and has threatened to seize the country's mining projects from their international operators.

AngloGold is about to move into South America. In its earnings release, the company said that it won exploration permits from the Colombian government to explore portions of La Colosa, a region in the Colombian Andes where gold porphyry has been discovered. AngloGold announced that it plans to spend $200 million over the next three to four years to "increase

its knowledge" of its La Colosa concession.

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