Obuasi Mine Will Be Subject To Significant Cost Cut — Anglogold

Obuasi MineMining firm AngloGold Ashanti (AGA) says its cost-cutting strategy on a number of project areas, including Obuasi, is progressing steadily.

AngloGold Ashanti said it would significantly cut back on its greenfield exploration spend, whilst withdrawing from a number of project areas and suspending others.

“Instead, we will focus on our high-yield assets in Colombia, Guinea and Australia,” Executive Vice President Graham Ehmtold delegates at the Diggers & Dealers conference, in Kalgoorlie, Western Australia, on Tuesday.

Mr. Ehm said the Obuasi project, in Ghana, would be subject to significant cost cuts.

“Obuasi has been a considerable challenge for some time, and our improvements there have not been sufficiently extensive or at a pace that could deal with the recent gold price fall, so a more radical approach is required,” he said.

Mr. Ehm noted that the restructuring of the 117-year-old operation would involve “significant” redundancies, along with the modernisation of the operation.

“We are not giving up on this 20-million ounce resource,” he said.

Mr. Ehm noted that during the first quarter of 2014, AngloGold Ashanti had reduced its all-in-sustaining costs by 22 per cent, compared with the previous corresponding period.

He said capital expenditure was expected to fall by 31per cent year-on-year in 2014.

During 2013, AngloGold Ashanti spent some $2 billion on capital expenditure, which resulted in first gold pour at its Tropicana mine, in Western Australia, and its Kibali mine, in the Democratic Republic of Congo, in September last year.

The two new mines were expected to deliver a combined 580 000 ounces to AngloGold Ashanti’s production portfolio during 2014.

AngloGold Ashanti is a global gold mining and exploration company with a diverse portfolio of mining operations and projects on four continents, with more than 96 per cent of the company’s revenue derived from the sale of gold produced at its operations located around the world.

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