[miningmx] — ANGLOGOLD Ashanti sees itself becoming an annual producer of five
million pounds of uranium following the incorporation of First Uranium’s tailings
operations, Mine Waste Solutions (MWS), into its asset portfolio.
AngloGold bought MWS for $335m as First Uranium embarked on a fire sale of its
key assets and said the acquisition would be completed during the current quarter.
The company already produces gold and uranium at its Vaal Reef surface assets in
the immediate proximity of MWS, in the Klerksdorp-Stilfontein-Orkney area of South
Africa’s gold fields. It didn’t report separate uranium production figures in its
quarterly and interim financials to end-June on Monday, but gold produced from
surface assets totalled 84,000 oz for the six months, with by-products (both silver
and uranium) contributing $104m in revenue ($40m from South African operations).
CEO Mark Cutifani told journalists during a conference call the main strategic
objective of the MWS transaction was to increase uranium production. He said the
company would draw up a report by end-September on how MWS would be
integrated with the Vaal Reef assets.
“We always saw the upside of MWS on uranium and the synergies it brings to our
other surface assets,’ Cutifani said. “It’s a case of the sum of the parts being greater
than the individual value.’
MWS would take AngloGold’s total uranium reserves in its Vaal River complex to
154.4 billion pounds. Pending on the findings of the integration study, Cutifani said
AngloGold would be looking at producing 3 million pounds of uranium within two to
three years, a figure expected to grow to 5 million pounds later on.
As for new gold ounces, Cutifani said MWS would add between 80,000 oz to 120,000
oz per year. Under the terms of the MWS agreement, AngloGold also has an
obligation to deliver 25% of gold produced from the gold delivery plant at a discount
to Franco Nevada to a cap of 312,500 oz over the life of the contract.
BEATING GUIDANCE
AngloGold’s shares were up slightly during early trade on Monday after the group
reported second-quarter production figures of 1.073 million ounces, better than
guidance and with costs lowering as a result to $801/oz.
Production was particularly assisted by the Continental Africa and Americas region,
as well as a recovery of the South African operations, which experienced fewer
safety-related stoppages.
According to Cutifani, all inclusive costs for the group were around $1,200/oz, with
those for South Africa closer to $1,100/oz.
The group declared a quarterly dividend of 100c (South Africa). Adjusted headline
earnings were down to $253m (65 US cents per share) compared to $342m the
previous year. According to Cutifani, the difference was caused, in part, by planned
higher expenditure on exploration and corporate costs; a higher tax charge; and last
year’s once-off benefit of $30m from the sale of the Ayanfuri royalty.
The price received for gold fell 5% to $1,607/oz. Among the group’s growth projects,
Tropicana in Western Australia is expected to be the first to production by end-2013.
AngloGold’s shares were trading at R280.19 during early morning trade, up 1% for
the day.
