ALBERTO Calderon said he hoped to narrow AngloGold Ashanti’s discount to its gold-producing rivals in two to four years by improving the performance of its Geita mine in Tanzania and developing greenfield projects in Colombia.
The former BHP executive was today unveiled as CEO of the three million ounce a year gold miner, effective September 1. He takes over from Christine Ramon who will return to the role of CFO. AngloGold’s last permanent CEO, Kelvin Dushnisky, resigned in August 2020.
“If we can bring the credibility back to Geita; if we bring the Colombian projects in and more predictable costs, and probably better overall operational excellence, I think we could claw back a significant part of that discount,” Calderon said in an interview.
Geita had to extend its current economically mineable gold reserve to beyond the current four years, he explained.
AngloGold’s shares have pulled back and are down 15% relative to the GDX Gold Index year to date.
The relocation of AngloGold’s primary listing to a northern hemisphere stock exchange was “not a priority in the short-term”, although Calderon added: “That too has to be addressed. It’s part of the whole suite of options.
“There are many [options], but in two to four years of work, my ambition would be to claw back and recover that discount the company suffers from,” he said.
Under Dushnisky, AngloGold embarked on a strategy to divest its remaining South African mines – sold to Harmony Gold for about $600m in total – and lodge an application to list either in London or a North American stock exchange.
Analysts believed Calderon would be a good fit for AngloGold.
“Mr. Calderon is a seasoned resources industry executive; his familiarity operating across multiple jurisdictions provides a degree of requisite experience for multi-jurisdictional AngloGold,” said RMB Morgan Stanley in a note to clients.
It added that Calderon, a Colombian by birth, would help to bring the South American country’s Gramalote, Quebradona, and La Colosa projects into production. The projects contain an estimated 38.5 million oz in mineral resource as well as copper by-products.
Calderon said he believed the seeds for AngloGold’s recovery were in its existing assets, adding that merger and acquisition activity – presumably it was the right deal – would not help narrow the group’s discount to its peer group as well as organic growth.
“I have tried to do M&A and failed, and I have tried to do M&A and succeeded. It’s very difficult doing M&A. Synergies are hard to find. I honestly believe in the short run there’s nothing more important than organic growth. In one year we have to see,” he said.
“The other rule of a CEO is ‘never say never'”.
“We see this announcement as a positive,” said RBC Capital Markets. “It firstly removes the uncertainty about leadership which has beleaguered the shares since previous CEO Kelvin Dushnisky’s unplanned departure in mid-2020,” it said.
“I am convinced that every large company needs a CEO for the times,” said Calderon. “In this case, more international experience, more commercial [experience] with a track record with mining company delivery value, and I thought that I could really help.”
