JOHANNESBURG (miningweekly.com) – Gold mining company AngloGold Ashanti is firmly focused on operation performance and the recovery of cost competitiveness as it implements its full asset potential review programme, on which it will report at three-monthly intervals.
This was made clear by AngloGold Ashanti CEO Alberto Calderon on Friday a media briefing covered by Mining Weekly after the Johannesburg Stock Exchange company declared an interim dividend of $121-million on 3% higher year-on-year production and a strong cash-flow improvement.
On whether the company would be engaging in merger-and-acquisition activity and adding to the consolidation of the gold-mining industry, Calderon could not have been clearer when he said: “Nothing adds more value for us in the medium term than improving operational performance and recovering cost competitiveness versus our peers – and that’s what we’re focused on, and that’s what we will continue to focus on.”
The company is targeting step-change in operational performance from its full asset potential programme, which began with the Sunrise Dam gold mine in Australia, where it has identified 33 improvement initiatives.
The biggest find at Sunrise is that the mineral resource can be increased by a million ounces this year through a push back of the Cleo open pit. At this stage, an increase in net present value of around A$300-million is envisaged.
“Going from underground to open pit in a way that makes economic sense requires some quite interesting and delicate analytics, and it’s just because we had the whole team on the ground and had the analytics of our consultant that this idea came through,” Calderon explained.
The other ideas, which are far smaller in capital expenditure, are about increasing overall mine productivity from 2.5million tonnes of development productivity a year to three-million tonnes because of a myriad of changes in underground maintenance, in new fleet management systems and other types of initiatives.
Improving metallurgical recovery by 2% was again achieved by using analytics to optimise a set of leaching reagents.
Those two steps are expected to decrease cash costs by about A$80/oz.
“If you add that on top of the idea of the pushback of the Cleo pit, you’re talking of a step change in performance,” Calderon said.
AngloGold’s full asset potential programme is now focused on Siguiri and in three months quantitative numbers can be expected on the on the Guinean gold mining operation.
“It’s all about taking these operations to their full potential and it’s a well proven methodology that has worked very well in other companies,” said Calderon in response to Mining Weekly.
Based on preliminary results of the optimised feasibility study for the Gramalote gold project in Colombia, a joint operation between B2Gold and AngloGold Ashanti, the partners have determined that the project does not currently meet their investment thresholds
for development at this time.
On the other hand, in the case of the Quebradona project in Colombia, the company will be seeking a new environmental licence request for Quebradona.
This follows the decision of Colombia’s environmental agency has re-affirmed its decision to archive the AngloGold’s environmental licence application relating to the Quebradona project, a gold/copper project.
Calderon explained that Quebradona has the gold equivalent ounces to be a long-life large 600 000 oz asset with Gramalote smaller 100 000 oz shorter life asset.
He expressed disappointing that more resource had not been found at Gramalote, which was more suited to a gold-mining company smaller than AngloGold.
“We prefer to focus our scarce capital in the bigger assets,” said Calderon, adding that disposal of Gramalote was now one of AngloGold’s options.
NEW BRAZILIAN TAILINGS REGULATIONS
AngloGold’s tailings storage facilities in Brazil, where a major tailings tragedy occurred a few years ago, are in the process of being converted to dry-stacking operations to comply with new legal requirements relating to tailings in Brazil.
On the company investing close to $42/oz on dry-stacking, Calderon commented: “We are putting a lot of money into it, but safety comes first, before anything.”