AngloGold Ashanti’s mine in Argentina is up for sale as new CEO Kelvin Dushnisky takes a hard line on assets and exploration tenements that do notfit the new strategy he outlined on Tuesday for the world’s third-largest gold miner.
AngloGold, which reported a strong return to profit in 2018, has within six months put Sadiola in Mali and Cerro Vanguardia in Argentina up for sale, a process Dushnisky stressed was part of a strategic reorganisation of the company’s 14 mines rather than any need to repay debt or to raise capital.
While Cerro Vanguardia is a profitable mine, with one of the lowest costs of production in AngloGold, the operation is an isolated, standalone mine with not much that can be added to it, Dushnisky said, adding there was the need for a new tailings site in the future requiring a capital investment.
The focus in AngloGold is to keep assets that are in clusters to exploit a critical mass in supply negotiations and government talks, or to retain mines and exploration prospects that had great geological potential, he said.
AngloGold will lower its net debt to earnings before interest, tax, depreciation and amortisation ratio to one times and possible less from 1.5 times, keeping its balance sheet strong and ensuring dividend payments to shareholders, he said.
Against those comments and AngloGold’s views on Cerro Vanguardia it is difficult to make an argument for a long-term future in the asset suite of the Mponeng mine in SA.
AngloGold would, however, seek stakes in interesting junior miners or exploration companies to keep its strong pipeline of projects stocked, Dushnisky said.