AngloGold ices gold concentrate at Cuiabá while strengthens tailings dam wall

ANGLOGOLD Ashanti said it will suspend gold concentrate processing at its 257,000 ounce a year Cuiabá Complex in Brazil while it was improving the safety of the Calcinados tailings storage facility (TSF) in line with best practice Canadian regulations.

While the tailings facility was safe, a risk assessment overseen by an independent expert recommended increased wall buttressing, said AngloGold. The study was required by authorities in order for the company to comply with increased regulations in Brazil.

There were two major disasters in Brazil involving collapsed tailings facilities including the burst at Vale’s Brumadinho iron ore facilities in 2019 which claimed the lives of about 270 people.

AngloGold said that in addition to suspending operations at the Calcinados TSF (tailings storage facilities), processing at the Queirox plant which services Cuiabá will also be put on hold. There was no timeline yet on when the buttressing would be completed until engineering and geotechnical work by an independent tailings expert was finalised.

Mining of ore would continue at Cuiabá with a total gold in concentrate of 10,000 oz per month being produced. Options to sell the gold concentrate to a third party until the Quieroz resumes operations were being assessed, said AngloGold.

AngloGold was commenting in a trading statement today in which it highlighted the likely decline in headline and basic earnings for the year ended December 31. Headline earnings would be between $530m and $560m (126 to 133 US cents per share), a decline of between 8% and 13%. Basic earnings for the period would be 49% and 55% lower at $280m to $315m (67 to 75 cents/share).

Impairments affecting basic earnings were booked in the period totalling $246m relating to Córrego do Sítio ($151m), Serra Grande ($38m) and Cuiabá.

There had been a recovery in production during 2022 compared to 2021, however. AngloGold estimated gold output of 2.74 million oz for 2022 which compares to 2.47 million oz in 2021. Obuasi gold mine, which was suspended in 2021 following a geological event, produced 250,000 oz for the year offering a sign that the Ghana titan was returning to its best.

Total cash costs in 2022 are expected to be less than 1% above annual guidance. This was despite “significant volaility in the macro environment impacting input pricing and inflation across our industry,” said AngloGold.

It added: “The operational improvements followed solid performances across the portfolio, underpinned by an improving grade profile amidst the ongoing reinvestment programme, and with Obuasi continuing its planned ramp up”.