[miningmx.com] – ANGLOGOLD Ashanti has appointed its long-standing
CFO, Srinivasan Venkatakrishnan (Venkat) as its CEO, a move reasonably well-flagged
in the market and greeted by South African gold analysts as ‘positive’.
“It will be a seamless takeover,” said David Davis, an analyst for Standard Bank
Securities Group. “He has been intimately involved in the group’s strategy with Mark
Cutifani (former CEO),” he added.
“Yes, we’re positive on this. I think it was expected,” said another gold analyst who
has to be anonymous owing to company policy.
“Great appointment. It provides continuity. He’s a good communicator and he’s
handled alot of investor meetings on his own,” said Daniel Sacks, an analyst for
Investec Asset Management.
AngloGold Ashanti said that joint interim CEO, Tony O’Neill, appointed following the
resignation of Cutifani, would remain an executive director on the company’s board
and would revert to his role as executive vice president of the group’s business and
technical development functions.
Venkat would also hold down the responsibility of CFO of AngloGold Ashanti until his
replacement could be found, the company said. A global search for a new CFO was
underway, AngloGold Ashanti said in an early morning announcement.
Venkat has been with AngloGold Ashanti for nine years in which time the market has
generally been in bull mode. He helped remove the company’s hedge book, deemed a
turning point in AngloGold’s recent history, but he has challenges ahead.
In April, the gold price sank $200 per ounce in a matter of days and followed selling
of gold-backed exchange traded funds in February, a development reflecting a more
positive attitude to the US economy in particular.
Inflationary pressure were already a feature of South African gold mining, but with
the price received lower, Venkat’s priority is seen to fall squarely on restructuring the
company.
“Optimising free cash flow per ounce and achieving a return on capital would seem to
be his priorities,” said Davis. “In a low gold price environment you can expect to see
a restructuring of the head office through to the mine. It’s inevitable,” he said.
Bank of American Merrill Lynch said capital cost discipline and balance sheet
management were key areas for AngloGold. “In our view, Venkat’s strong grasp on
the key drivers at the various operations will allow him to increase the group’s focus
on operating and capital cost discipline as well as balance sheet management – all of
which are imperative in the current lower gold price environment,” it said.
AngloGold Ashanti promised in its announcement to provide an update on its
operational goals at its forthcoming first quarter results scheduled for May 13.
“We’re extremely pleased to have an executive of Mr. Venkatakrishnan’s calibre to
lead AngloGold Ashanti through the next phase of its development,’ AngloGold Ashanti
chairman Tito Mboweni, said.
“He will enjoy my personal support and the full support of the board as he brings his
extensive experience to complement the impressive depth of our operating and
strategic talent,’ he added.
