Christine Ramon, Interim CEO
ANGLOGOLD ASHANTI has announced that its Obuasi Redevelopment Project, which sits atop the 31-million-ounce Obuasi Mineral Resource, remains on budget and on track to ramp up to a steady-state mining rate of 4,000 tonnes a day.
The company said the mine was expected to reach its full production rate in the second half of 2021. The plan remains for the mine to produce an average of 350,000oz to 400,000oz of gold a year, at an all-in sustaining cost of $800/oz to $850/oz, which is lower than the company’s average cost of production, and in the lower half of the industry cost curve.
In the second decade of its life, both costs and production will improve further from these levels, as mining fronts reach higher grade parts of the ore body.
“Obuasi will be a world class, high-margin asset for AngloGold Ashanti for over 20 years,” said Graham Ehm, AngloGold Ashanti’s Executive Vice-President: Group Planning & Technical, who added, “It’s a cornerstone asset for us and we are focused on bringing it into full production in the months ahead.”
At Iduapriem it said, Cut 7 and Cut 8 waste-stripping which began in recent months was making good progress and would extend through next year, extending mine life to almost a decade. Preliminary work has also started on a new tailing’s facility, to support the longer mine life.
AngloGold Ashanti Interim Chief Executive Officer, Christine Ramon, has affirmed that the company is on track to meet its cost and production guidance for 2020, given a strong operating performance from its key assets.
The company’s guidance was initially withdrawn in March this year due to the uncertainty created by the Covid-19 pandemic. Revised guidance was issued on September 21, 2020, pegging production for the year between 3.03Moz and 3.10Moz, and all-in sustaining costs between $1,060/oz and $1,120/oz.
AngloGold Ashanti maintains a prudent approach to long-term mine planning, using a $1,200/oz gold price for its Ore Reserve calculations in 2020.
Balance Sheet
AngloGold Ashanti has strengthened its balance sheet by reducing borrowings, increasing liquidity and extending the average maturity of its debt by issuing a $700 million 10-year-bond at a coupon of 3.75%, the lowest it has ever achieved. The company is on track to build on the robust free cash flow of $516 million in the first nine months of the year and is expected to post its strongest annual free cash flow performance in almost a decade.
Last month, the company announced that it would double its pay-out ratio to 20% of free cash flow, before accounting for growth capital expenditure. This combination will underpin a sharply higher dividend payment year-on-year.