AngloGold investing $400 million in Guinea

AngloGold Ashanti (NYSE:AU), the world's third largest gold producer in terms of output, is ready to invest over $400 million in Guinea over the next several years, a source at the government of the West African nation told Reuters.

"Initially, they will invest $117 million and they will add an additional $294 million" over eight years according to a senior official at the Guinea's ministry of mines.

AngloGold already owns the Siguiri mine, a 300,000 ounces per year producer, in the country. AngloGold holds an 85% interest in Siguiri with the balance of 15% being held by the Government of Guinea.

The operation is a multiple open-pit oxide gold mine in the relatively remote district of Siguiri, around 850km by road, north-northeast of the country’s capital, Conakry. The government official hinted that some of the investment could go towards underground expansion.  According to AngloGold the area surrounding Siguiri has significant potential for gold mining and has long been an area of traditional artisanal mining.

AngloGold owns 17 mines mines in nine countries, and the Johannesburg-based miner produced just under 4 million ounces last year. Like its peers, shares in Anglogold has been on a tear with the counter surging 152% in value this year. AngloGold is worth $8.1 billion on the NYSE, trading at its highest levels since mid-2014.

Guinea is one of the top bauxite (the most common aluminum ore) exporters in the world and the Simandou project in the south of the country could catapult it to the top tier of iron ore producers.

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