The company has revised its FY 2009 production outlook downwards to 4.55 mn – 4.6 mn oz, compared to earlier guidance of 4.7 mn – 4.8 mn oz, due to ongoing safety problems in South Africa. Despite this, we have marginally revised our FY 2009 revenue estimates upwards, based on our expectations of higher international gold prices. The company expects its gold price realisation to be at an approximately 7% discount to international gold prices. Over a longer term horizon, the company has set a production target of 6 mn oz per annum by FY 2013, which will benefit its top-line over the same period. On the cost front, the company expects to incur total cash costs of US$590 per oz in 4Q 09, based on higher electricity prices. Although higher costs expected in 4Q 09 will weigh on the company’s operating margin in FY 2009, we have raised our margin estimates for the year given lower- than-expected cash cost incurred by the company in 3Q 09. At the current prices levels, we believe the company’s ADR is over valued and hence maintain our SELL rating on the same.

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