G-khan
11-02-2003, 08:24 AM
Posted: 2003/10/31 Fri 16:47 ZE2 | © Mineweb 1997-2003
JOHANNESBURG – The management of world number two gold producer AngloGold, showed it could walk and chew gun at the same today by delivering the pick of South Africa’s gold company results. And this was despite being embroiled in a bidding war for Ghana’s Ashanti Goldfields over the entire quarter. Headline earnings, which exclude the once-off non-cash effects of derivatives, were 1.5 percent higher at $66 million. In dollar terms, however, costs climbed by 6 percent. At the operating level the group performed similarly well, showing a relatively slight 3 percent decline in operating profit to $136 million.
Good grades mined at the group’s flagship Kopanang and Great Noligwa mines in South Africa, as well as from its Geita joint venture in Tanzania, helped the result along. An up-tick in the average grade of AngloGold’s richer South African underground mines, more than offset a 4 percent decline in grades from its lower-grade open pit operations.
The group managed to contain costs at its South African operations where, despite an effective 13 percent wage increase in June, cash costs increased by only 1.4 percent. Costs for the quarter remained comfortably the lowest of the big three South African gold producers at R56,311/kg, providing a 35 percent cash margin at an average gold price received of R86,619/kg.
By way of comparison the group’s nearest rival, Gold Fields, produced its gold during the quarter at R61,222/kg while Harmony Gold’s costs were R75,319/kg.
AngloGold’s chunkier margins show the benefits of the group’s geographical diversification. During the September quarter AngloGold produced 546,000 ounces - 40 percent of its production - from outside South Africa, where the strong rand has not ravaged margins.
Notwithstanding the solid result, however, AngloGold chief executive Bobby Godsell said the company had decided to close its loss-making Savuka operation in South Africa’s North West province. The mine produced its 44,000 ounces of gold during the quarter at $487/oz and will gradually be closed down over the next two years.
Godsell said the natural attrition of AngloGold’s workforce, which claims about 250 jobs a month, would absorb most of the workforce at the mine. The remaining workers would be shifted to the group’s other operations. He said AngloGold was not in wholesale retrenchment mode.
At first glance, Savuka would appear to be a prime candidate for sale to one of South Africa’s burgeoning caste of low-cost turnaround specialists. AngloGold has already disposed of its entire Free State portfolio to Harmony, at a time when most of those operations where producing gold close to the margin.
Durban Roodepoort Deep, the marginal South African miner, has long been a hopeful scavenger for the mine, which lies next to its own Blyvooruitzicht operation. The sale has been held up by the fact that Savuka lies upstream from AngloGold’s mammoth Tau Tona operation. The two mines share plant and, more importantly, Savuka pumps the water that would otherwise flow into its more profitable neighbouring operation.
Dave Hodgson, AngloGold’s operations director, said the relationship between the two operations meant AngloGold had to be “careful about a sale”. He said AngloGold would, however, consider any offer that came along provided it offered a manageable solution to the pumping conundrum.
The sale of the mine could offer a good opportunity for AngloGold to cut another black empowerment deal, as could ERGO, its gold reclamation operation which produced 45,000 ounces at $408/oz.
http://www.mips1.net/mggold.nsf/Current/4225685F0043D1B242256DD000515DA0?OpenDocument
JOHANNESBURG – The management of world number two gold producer AngloGold, showed it could walk and chew gun at the same today by delivering the pick of South Africa’s gold company results. And this was despite being embroiled in a bidding war for Ghana’s Ashanti Goldfields over the entire quarter. Headline earnings, which exclude the once-off non-cash effects of derivatives, were 1.5 percent higher at $66 million. In dollar terms, however, costs climbed by 6 percent. At the operating level the group performed similarly well, showing a relatively slight 3 percent decline in operating profit to $136 million.
Good grades mined at the group’s flagship Kopanang and Great Noligwa mines in South Africa, as well as from its Geita joint venture in Tanzania, helped the result along. An up-tick in the average grade of AngloGold’s richer South African underground mines, more than offset a 4 percent decline in grades from its lower-grade open pit operations.
The group managed to contain costs at its South African operations where, despite an effective 13 percent wage increase in June, cash costs increased by only 1.4 percent. Costs for the quarter remained comfortably the lowest of the big three South African gold producers at R56,311/kg, providing a 35 percent cash margin at an average gold price received of R86,619/kg.
By way of comparison the group’s nearest rival, Gold Fields, produced its gold during the quarter at R61,222/kg while Harmony Gold’s costs were R75,319/kg.
AngloGold’s chunkier margins show the benefits of the group’s geographical diversification. During the September quarter AngloGold produced 546,000 ounces - 40 percent of its production - from outside South Africa, where the strong rand has not ravaged margins.
Notwithstanding the solid result, however, AngloGold chief executive Bobby Godsell said the company had decided to close its loss-making Savuka operation in South Africa’s North West province. The mine produced its 44,000 ounces of gold during the quarter at $487/oz and will gradually be closed down over the next two years.
Godsell said the natural attrition of AngloGold’s workforce, which claims about 250 jobs a month, would absorb most of the workforce at the mine. The remaining workers would be shifted to the group’s other operations. He said AngloGold was not in wholesale retrenchment mode.
At first glance, Savuka would appear to be a prime candidate for sale to one of South Africa’s burgeoning caste of low-cost turnaround specialists. AngloGold has already disposed of its entire Free State portfolio to Harmony, at a time when most of those operations where producing gold close to the margin.
Durban Roodepoort Deep, the marginal South African miner, has long been a hopeful scavenger for the mine, which lies next to its own Blyvooruitzicht operation. The sale has been held up by the fact that Savuka lies upstream from AngloGold’s mammoth Tau Tona operation. The two mines share plant and, more importantly, Savuka pumps the water that would otherwise flow into its more profitable neighbouring operation.
Dave Hodgson, AngloGold’s operations director, said the relationship between the two operations meant AngloGold had to be “careful about a sale”. He said AngloGold would, however, consider any offer that came along provided it offered a manageable solution to the pumping conundrum.
The sale of the mine could offer a good opportunity for AngloGold to cut another black empowerment deal, as could ERGO, its gold reclamation operation which produced 45,000 ounces at $408/oz.
http://www.mips1.net/mggold.nsf/Current/4225685F0043D1B242256DD000515DA0?OpenDocument