ANGLOGOLD Ashanti is going to show a major step up in gold production from the end of 2013 as a number of major, fully financed growth projects begin contributing, CEO Mark Cutifani said.
AngloGold does not see any major acquisitions because it does not see much value in its competitors assets, but it will continue looking for smaller opportunities. It has completed the purchase of Mine Waste Solutions from First Uranium in South Africa, bringing to five the deals it has done in the past four years, Mr Cutifani said.
Those five deals would add 700,000oz of gold production a year to AngloGold, the world's third-largest gold producer, at a cost 30% lower than it costs to bring ounces into production in North and South America, he said.
"Given what we've got inside our portfolio, with exploration and brownfields stuff, we're not terribly excited by the possibilities of mergers and acquisitions on any large scale. We still think the value is in the small end of the market, where the guys are a bit stressed for cash. We think that's where the real value is," he said.
AngloGold is building two gold projects in Democratic Republic of Congo, one in Australia and another in the US. On these projects, the company is either the sole operator or in a joint venture.
At Sadiola Deeps in Mali, AngloGold has suspended the start of its $500m-$600m gold project that could deliver 400,000oz a year pending agreements with the government there. The project had been scheduled to deliver gold from 2014.
AngloGold has signed six agreements with the Mali government and is busy on a final two outstanding agreements on power access and cost of that power. "We are likely to move towards a decision during this quarter," Mr Cutifani said.
Production from the new projects will start with Tropicana in Australia starting to deliver gold from the end 2013, as will Kibali and Mongbwalu in Congo. "You've got a big lick of production to come on stream in a relatively short period of time, which is the last quarter of 2013 into the first quarter of 2014," Mr Cutifani said.
The Kibali project shared with Randgold Resources, will cost AngloGold $980m and will deliver in total upwards of 600,000oz and that could be increased after five years.
Mongbwalu will cost $345m for 130,000oz, with a potential to double up at a cost 40% below the initial capital expenditure of $345m because a lot of infrastructure will be in place by then.
Tropicana will cost up to $800m and deliver 500,000oz. AngloGold owns 70% of the project.
The Cripple Creek project in the US will add 130,000oz from 2016.
The Mine Waste acquisition would allow AngloGold to raise uranium output to 3-million pounds in the next two or three years by integrating those assets with its own, Mr Cutifani said. In five years, uranium output could rise to 5-million pounds.
Mr Cutifani said the gold price could test $1,700 during the second half of this year.
seccombea@bdfm.co.za
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