AngloGold prepares to sell US, Mali mines

[miningmx.com] – ANGLOGOLD Ashanti is considering an offer for its Yatela and Sadiola mines in west Africa’s Mali and had decided to sell some or all of its Cripple Creek & Victor (CCV) operation in the US.

The R47.5bn gold producer said the buyer for its 41% stake in Sadiola and 40% stake in Yatela met its qualifying criteria and that a binding bid had been requested.

Sadiola and Yatela produced 85,000 and 11,000 attributable ounces of gold respectively in 2014, the company said. It was selling the assets in order to improve the overall quality of its portfolio.

CCV produced 211,000 ounces of gold in 2014 and was in the implementation phase of an expansion project that would increase production in 2015.

“As we have mentioned since the latter part of 2014, we will work actively to reduce our net debt levels over the next two to three years to provide the company with greater financial flexibility, but in doing so, we will not act in haste nor compromise long-term value,’ said AngloGold Ashanti CEO, Srinivasan Venkatakrishnan.

“As one of a number of options in this regard, we have initiated a plan to identify a joint venture partner or purchaser in respect of our interests in CC&V,” he said. Shares in AngloGold were 2.2% higher on the Johannesburg Stock Exchange.

The divestments represent steps in AngloGold’s strategy to reduce net debt $1bn to about $2bn, improve cash flow and lower costs.

It had already embarked on a second stage strategy of reducing overhead costs by ‘capturing’ synergies between neighbouring mines in South Africa whilst introducing partners in its Colombia business as well as entering into a joint venture or sell one of its operating assets.

It had cut overhead expenditure by two-thirds in 18 months whilst “… improving the quality of its portfolio by bringing into production two new, low-cost mines, selling some assets, closing others and removing loss-making ounces from ongoing operations,” it said in a statement.

“All-in sustaining costs for 2014 were 18% lower than in 2012, with further reductions forecast this year,” it said.

Venkatakrishnan said in February that there was “intense competition” among potential buyers for assets from which the firm said it wanted to sell.

AngloGold said last year it would consider bids for La Colosa, its Colombian property, as well as mines in West Africa such as Iduapriem and Obuasi, the latter currently the focus of a $209m downsizing and restructuring programme.

Venkatakrishnan said at the time that “work was underway”, but he declined to provide details of potential sales or joint ventures. “We have not named any particular assets as they are operating mines with stakeholders involved,” he said.

In February, the group closed the sale of its stake in Navachab, a gold mine in Nambia, for $110m to OKR, a private equity firm.