AngloGold Asset Streamlining to Start With Mali Mine Sale

(Bloomberg) -- AngloGold Ashanti Ltd. is looking to sell its Sadiola mine in Mali as the company kicks off a process to streamline its assets to focus on high-quality, core operations.

The world’s third-largest gold producer has initiated a process to sell Sadiola, one of its smallest operations, which it jointly owns with Iamgold Corp., Chief Executive Officer Kelvin Dushnisky, said on a conference call Monday. Sadiola, where AngloGold has been negotiating a new fiscal regime with the government, would “sit well in another portfolio,” he said.

Dushnisky said he sees potential to develop new projects at exploration sites in Nevada, in the U.S., if exploration activities currently underway confirm commercial deposits.

Key Insights

  • AngloGold plans to sell assets that aren’t core to the business and focus on its best assets and where the company is able to lower costs. The producer’s geographical spread with 14 assets “feels heavy” and it makes sense for it to streamline, Dushnisky said.
  • Dushnisky, who took over in September, has ruled out “fire sales” as it considers its future in its home country. The Johannesburg-based company has no plans to exit Mponeng, South Africa’s deepest gold mine. Mponeng’s deposit can still be exploited until 2036 and AngloGold is in “good shape” there, the CEO said.
  • “We certainly think there is potential” in Nevada, Dushnisky said. “We have a lot of experience in the U.S. and certainly if it’s a deposit that has commercial value, it’s an area we are comfortable developing an operating project in future.”

Market Reaction

  • The shares rose as much as 9.2 percent to the highest since June 2017 in Johannesburg.
  • The stock is up about 30 percent since Dushnisky became CEO.

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  • AngloGold’s output fell 15 percent to 851,000 ounces in the third quarter from a year earlier.
  • Full-year production will likely be at top end of the forecast range of 3.3 million ounces to 3.5 million ounces.
  • The company secured a new $1.4 billion, multi-currency revolving credit facility with a syndicate of 14 banks, and cut its net debt by 15 percent to $1.75 billion in the third quarter.
  • The CEO said he’s positive about Tanzania despite uncertainty regarding the country’s new mining laws.
  • For more details on earnings, click here.

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