AngloGold says strong metal prices not helping planned assets sale
South Africa’s AngloGold Ashanti (JSE:ANG) (NYSE:AU), the world’s third-biggest producer of the precious metal, said the recent surge in bullion prices has not made it easier for the company to sell the mines it has put up for sale.
“It’s a challenging market in terms of divestment because of speculation on potential assets coming into the market,” chief executive officer, Kelvin Dushnisky, said in a conference call on Thursday.
The company, which is streamlining its portfolio to ensure greater management focus and higher returns, has received “several bids” for the operations it wants to offload. Those include, in Argentina, Cerro Vanguardia, and Mal Sadiola and in South Africa Mponeng, the world’s deepest gold mine.
Dushnisky, who took the helm in September 2018 and previously served as the president and executive director at Barrick, said there wasn’t a deadline for any deals.
The executive’s comments come as AngloGold posted a 21% increase in interim earnings in the three months leading to June 30 on the back of solid performance from its Kibali joint venture, lower costs and high gold prices.
Those factors, the miner said, helped counteract lower output in South Africa.
Obuasi in Ghana remains a strategic priority for AngloGold, with work continuing towards meeting a tight schedule of achieving its first gold pour at the end of this year, it said.
One of the company’s best performing mines in the quarter was Kibali, in the Democratic Republic of Congo, which it co-owns with Barrick Gold and state-owned Société Miniere de Kilo-Moto.
Geita (in Tanzania) and Tropicana (in Australia) also contributed to the jump in profit, AngloGold said.
The company kept its 2019 production guidance of between 3.25 million ounces to 3.45 million ounces, as well as keeping expected costs and sustaining capital expenditure unchanged.