[miningmx.com] – AngloGold Ashanti CEO Srinivasan Venkatakrishnan intends driving a hard bargain on any sale of the Iduapriem mine in Ghana which is one of a number of assets potentially up for grabs as the gold group restructures.
That’s bad news for Gold Fields CEO Nick Holland whose Tarkwa mine sits contiguous with Iduapriem making Gold Fields the obvious buyer provided suitable terms could be negotiated.
Iduapriem is exactly the kind of operation Gold Fields is looking to buy after its two previous successful acquisitions in Australia in 2001 and 2013.
Holland laid out his strategy in June 2014 when he stated, “I would rather do more deals like the one we have just done in Australia which is to buy assets that are cash generative from the get-go and that are potentially synergistic with other operations in the region.’
But he faces an uphill battle to persuade AngloGold to part with Iduapriem on terms Gold Fields would find acceptable judging by the tone of Venkatakrishnan’s comments on Monday when interviewed after the presentation of AngloGold’s results for the March quarter.
Venkatakrishnan commented, ” Iduapriem has very good potential. It is very cash generative. We totally understand that Gold Fields needs this asset soon given where Tarkwa is in terms of its life and, from that point of view, it does make sense combining the two.
“Our view on the value of Iduapriem and Gold Fields’ view on value are totally different. We believe we can turn that asset around even further – as we have done in the past – and we want to continue on that track. There’s good potential at Iduapriem so to give up that upside right now at a bargain basement price does not make sense.’
In November, Holland confirmed that Iduapriem was a potential acquisition opportunity but cautioned that the probability of a deal was “never high’ given a divergence in expectations between buyer and seller.
He pointed out the two mines had been previously mined as one larger ore body back in the 1990’s and that “if you stand above the Teberebi pit, which is one of our pits, you can actually look into their pit’.
Holland repeated these statements in April in reply to questions at the group’s presentation of its mineral reserves and resources position as of end-December.
Asked about the state of play between the two groups Venkatakrishnan replied that “telephone discussions have taken place in the past.’
The situation regarding sale of the Cripple Creek & Victor (CC&V) mine in Colorado has become clearer with AngloGold stating that “a transaction resulting in a sale of 50% of the mine structured as a joint venture is possible, provided that the company’s value criteria are met.’
This follows the submission to AngloGold of “binding offers from counterparties’ to either buy 50% of CC&V through a joint venture or purchase the mine outright.
Venkatakrishnan confirmed that negotiations with Canadian-listed Iamgold were continuing for the sale of AngloGold’s 41% stake in the Sadiola mine and 40% stake in the Yatela mine in Mali.
