[miningmx.com] – ANGLOGOLD Ashanti declared itself unimpressed with the investor response to the unbundling of Gold Fields’ South African assets, but said it had not yet ditched similar plans for its own South African mines.
“At this stage, unbundling does not seem to be a compelling option,” said Mark Cutifani, who was presenting AngloGold’s quarterly and full-year financial results as its CEO for the last time before joining Anglo American where he will take over from outgoing CEO, Cynthia Carroll.
He added, however, that the major frustration of his near six-year tenure at the company had been the under-performance of the share price, and acknowledged that it was a priority for the group to remedy its market valuation.
Gold Fields announced last year that it would unbundle its South African mines, except for its growth asset, South Deep, creating a 1.2 million ounce/year company it named Sibanye Gold.
Sibanye Gold listed on February 11 with shareholders in Gold Fields receiving their Sibanye Gold shares a week later, on February 18. Since February 18, the stock has shed 20% of its value.
“AngloGold is so far ahead of the game, it’s a shame that we’re seeing the share price that we have,” said Cutifani. He said the company was more than 68% undervalued – an observation made by New York-based hedge fund, Paulson & Company which has been a seller of AngloGold shares lately after becoming its largest single shareholder several years ago.
Paulson & Co had publicly stated AngloGold should consider an unbundling of its mines which would unlock 68% of its value, but Shrinivasan Venkatakrishnan, currently acting joint interim CEO at AngloGold and its CFO, said unbundling “… doesn’t fill us with much enthuasiam”.
He added, however, that depending on the performance of Gold Fields post its unbundling, it might provide “… a benchmark for us later”.
In the meantime, AngloGold was assessing its entire portfolio of assets on a fix, sell, or close basis – a process that Tony O’Neill, acting joint interim CEO responsible for the operations, said would hold “nothing sacrosanct”.
The plan is to remove $100 per ounce in costs and also involved taking production out of the South African assets by means of natural attrition. “Some 200,000 ounces will be removed from the production profile,” said Cutifani.
Commenting further on the prospect of ever unbundling its South African assets, Cutifani said on the sidelines of the interim and year-end presentation that the company first wanted to assess how it tacked exogenous factors that had affected the company’s share price since the end of 2010.
“There have been four things that have knocked us: the silicosis threat, the prospect of nationalisation, Section 54 [safety related closures], the effects of Marikana and the strikes,” said Cutifani.
“We want to see if there’s a way we can better address this issues with Government in the things that we say and do,” Cutifani said.
