Bobby Godsell, CEO, AngloGold Ashanti
Send this article to a friend
Print this page

» AngloGold knocks 5% off hedge book
» Anglo sees metal prices remaining strong
» AngloGold in court in June
» Anglo $3bn share buyback in 2007
» AngloGold in 40% Ux boost
» AngloGold's TauTona slashes output
» Sense of urgency in AngloGold's exploration

» JSE:ANGLOGOLD ASHANTI LIMITED:
16000c 0%

AngloGold studies deepening SA mines
Allan Seccombe
Posted: Fri, 04 May 2007

[miningmx.com] -- ANGLOGOLD Ashanti is investigating further deepening its South African mines to maintain its production profile beyond five years when its output will begin to decline. It is also weighing mothballed prospects made viable by high gold prices.

The rand gold price at R150,000/kg is at levels unseen in the past 20 years, said CEO Bobby Godsell.

“The price parameter has caused this company to contemplate growth in the sense of thinking about Moab Khotsong phase two and further deepening Mponeng,” Godsell said.
mainly an extension of life
AngloGold is busy with deepening its TauTona mine in a project that will begin producing gold in 2008 and yield 2.6 million oz of gold over nine years to 2017. The project costs $168m.

A second deepening project at the nearby Mponeng mine will cost $252m, starting output in 2013, will add 2.5 million oz over a decade.

The Moab Khotsong mine began production in 2006, producing 44,000 oz. This year output will reach 80,000 oz.

“This is mainly an extension of life, extending levels of production into the future rather than increasing levels of production,” Godsell said.

AngloGold’s seven underground mines in South Africa produced 2.554 million ounces in 2006, five percent less than the previous year, at a total cash cost of $285/oz.

“AngloGold’s South African assets are likely to be at or about the levels they are at now for four or five years and after that there’s a decline. We are aggressively looking at opportunities to fill that gap,” said Neville Nicolau, chief operating officer for the African assets.

Click Here to subscribe to our daily newsletter
Those opportunities are internal and consisted of the Moab phase two project, Zaaiplats, the Mponeng carbon leader reef, the Great Noligwa pillar and an extension of the Kopanang ore body, he said.

Srinivasan Venkatakrishnan, AngloGold’s chief financial officer, told Miningmx there were also prospects that were previously mothballed that were now financially viable with the high gold price.

“We are looking a variety of other options; sites that we walked away from because of the lower price. We are looking at whether these are viable at the current prices,” he said, adding there were two or three such projects that could “come up” this year.

“There is huge upside from existing projects around existing mines, we are looking at new projects around existing mines and we are looking at potential virgin sites,” he said.

Another source of income will be uranium from 2009 once a 25% increase in uranium production from 1.5 million pounds/year kicks in and a large chunk of its forward contracts at prices of around $30/lb fall away.

The current uranium price is $113/lb.