AngloGold Ashanti has carried out the first gold pour at its Obuasi mine in Ghana so meeting CEO Kelvin Dushnisky’s forecast made in October that the mine would “resume production by year-end”.
Obuasi has had a troubled history ever since AngloGold acquired the mine in 2003 when it took over Ashanti Goldfields to create the current AngloGold Ashanti group.
Mining activities were suspended five years ago when the mine was closed down after then CEO Srinivasan “Venkat” Venkatakrishnan decided the group could no longer afford to subsidise the loss-making operation.
A subsequent attempt by Venkat to set up a JV with Randgold Resources to re-open Obuasi failed when Randgold CEO Mark Bristow refused to get involved after carrying out a due-diligence exercise on the operation.
But Dushnisky has been keen on Obuasi’s prospects since replacing Venkat as CEO in September 2018 declaring in February 2019 that Obuasi “was in a class of its own on a number of metrics” and comparing the mine to Barrick’s highly successful Goldstrike mine. Dushnisky was president of Barrick prior to joining Anglogold.
In October, Dushnisky stated “ I could not be more enthusiastic about Obuasi” and his backing for the project stands in sharp contrast to his view on the future of AngloGold Ashanti’s remaining South African operations where he is presiding over a sale of the group’s Mponeng mine.
Dushnisky commented today that, “producing first gold on budget and on a tight schedule is a significant achievement for the company………..restarting this important mine is testament to the focused execution by our team on the ground as well as the clear investment framework and supportive environment created by the President of Ghana and his government and the King of Ashanti.”
After a ramp-up period AngloGold Ashanti estimates the mine will produce gold at an average rate of 350,000oz/year to 400,000oz/year for the first ten years and at levels above 400,000oz/year over the life of the mine at an all-in sustaining cost of around $800/oz.
The initial project capital cost for Obuasi remains “in a range of $495m to $545m spent between 2018 to the end of 2020.”
According to Obuasi MD Eric Asubonteng the project has spent 80% of the capital cost “in-country” with Ghanaian companies given preference in the procurement of goods and services while employment has prioritised Ghanaians from the immediate area around the mine wherever possible.