Africa-focused gold producer Randgold Resources (LON:RSS) is walking away from a proposed joint venture with AngloGold Ashanti (NYSE:AU) (JSE:ANG) that was intended to redevelop the Obuasi gold mine in Ghana.
The announcement comes barely three months after Randgold announced its interest in AngloGold’s mine, which is one of Africa’s largest gold mines.
“We spent more time on it than most people would do on a normal M&A. But it got to the point where whichever way we cut the cake, we couldn’t get it to pass our criteria,” said Randgold’s chief executive, Mark Bristow, according to The Telegraph. “Anglo has never made any money out of this asset, ever,” he added.
Randgold, one of the very few bullion miners that have kept its head above the water despite plummeting gold prices, has repeatedly touted its intention to acquire new assets to add to its four operating mines. But it has stuck rigidly to criteria about the size of return it wants and the amount of gold a mine must be capable of producing.
AngloGold shut down Obuasi last year pending a proposed revamp, which could cost up to $1 billion, according to an estimate divulged when the proposed partnership was announced in September.
The miner said Monday it would now continue to operate the mine — which dates back to 1907 — on a limited basis. “In the current environment, we believe it is prudent to conserve our resources and to revisit this opportunity when market conditions improve,” AngloGoldchief executive, Srinivasan Venkatakrishnan, said in the statement.
The two companies are involved in other projects together, including the Kibali mine in the Democratic Republic of Congo, and Morila in Mali. Both are operated by Randgold.