AngloGold Ashanti cuts spending, suspends output guidance
South Africa’s AngloGold Ashanti on Friday withdrew its production guidance and said it would conserve cash and cut non-essential spending after some operations were suspended due to coronavirus.
The novel virus that has infected more than 500,000 people and killed more than 24,000 globally has roiled markets and disrupted supply chains as governments impose restrictions on movement to curb its spread.
AngloGold, owner of Mponeng, the world’s deepest mine, said its South African operations and its Cerro Vanguardia facility in Argentina have both suspended production due to a lockdown over the coronavirus in both countries.
The state of Goias in Brazil, where AngloGold’s Serra Grande mine is located, also on Thursday extended a set of restrictions on the operation of non-essential business to include mining.
The company said current shutdowns would reduce its output by 30,000–40,000 ounces this year, less than 2% of annual production, and that it was withdrawing its market guidance amid the uncertainty around the outbreak.
“We have been proactive in positioning ourselves to respond to the impact of the outbreak,” Chief Executive Kelvin Dushnisky said.
AngloGold, which also has operations in Ghana, said it has drawn down $1.4 billion on its U.S. dollar revolving credit facilities for a $700 million bond redemption due mid-April and to provide additional liquidity headroom.
The miner said it had $463 million of cash, $2.0 billion of debt and revolving credit facilities with $1.42 billion and 4.65 billion rand ($264 million) available at the end of 2019.
“Management will continue to take a prudent and proactive approach to managing the company’s liquidity, which may include procuring additional credit facilities or debt over and above its current facilities,” AngloGold said.
AngloGold said last week that a worker at its Obuasi gold mine in Ghana had tested positive for coronavirus.
As a precaution, the supply chain teams have placed orders to increase safety stocks on critical items at its operations AngloGold said, adding that it was generally targeting inventories of three to six months on primary consumables.
($1 = 17.6275 rand)
(By Tanisha Heiberg; Editing by Elaine Hardcastle)