PRODUCTION at about 90% of AngloGold Ashanti’s operations was back to normal following relaxation of COVID-19 restrictions in all of the group’s districts bar South Africa.
Full-year guidance remains withdrawn, but as per its March 27 announcement it is unlikely to be significantly disturbed.
This news comes as AngloGold received an uppish assessment from credit ratings service Moody’s which acknowledged the benefits of the group’s geographically diverse portfolio, as well as its capital management philosophy.
AngloGold today paid the principal of $700m on its 10-year bond which was issued in April 2010 using a $1.4bn drawdown from its revolving credit facility. The balance of the drawdown was kept in the kitty whilst it also seeks additional credit facilities.
Its possibly over-cautious approach is amid advice from the World Health Organisation that countries affected by COVID-19 ought not emerge from their respective lockdowns too soon, or risk additional widespread infections.
Commenting on production, AngloGold Ashanti said its 225,000 ounce a year Cerro Vanguardia operation was at ramped up capacity having re-started mining on April 6. It would process stockpiles which would keep production at near planned levels despite having fewer staff on site as per COVID-19 restrictions.
Mining had been suspended since March 21. Operations had also resumed at Serra Grande in Brazil. It produced 123,000 oz last year.
Operations also continued in Australia, Tanzania, the Democratic Republic of Congo, Guinea, Ghana and Mali. Exploration work in the US has been suspended for a time. “The situation related to COVID-19 continues to evolve rapidly and the company will continue to assess developments and provide updates as they occur,” AngloGold said.
This leaves South Africa where a strict five-week lockdown has all be extinguished production from the gold mining sector. AngloGold said it had restarted some mining from its surface gold dump re-treatment facilities at its West Wits operations and the Mine Waste Solutions business unit, in the Vaal River region.
The restart of these operations on April 6 was been facilitated by about 500 employees, spread across both the West Wits and Vaal River regions. This is less than a third of the usual staff complement for these business units, and roughly 8% of our total South Africa workforce, the company said.
In 2019, the marginal ore dumps business produced 70,000 oz and Mine Waste Solutions produced 106,000 oz.
Production from Mponeng, the underground mine that is to be sold to Harmony Gold for $200m in cash (with $100m royalty stream stitched into the deal), was completely suspended. It was expected to resume production on April 30, the currently scheduled end to the country’s lockdown.
The National Union of Mineworkers said it had agreed its members would return to work at the facilities of Harmony Gold from May 2, a day after the end of South Africa’s extended lockdown. Harmony had agreed to pay employees for the five-week period, it said.
“We have agreed with Harmony Gold that … workers will be utilising the 1st of May which is the Workers Day to travel from various homes to their places of work,” said the union’s General Secretary, David Sipunzi.
“Those who are locally based are free to go to their places of work on the 1st of May for the screening of the coronavirus,” he said. “Those who will be travelling afar will have to go to their places of work on the 2nd of May for screening.”
