Moody’s upgrades AngloGold Ashanti credit rating to Baa2
The Baa2 is rated as medium grade, with some speculative elements and moderate credit risk. It means a company has a high ability or acceptable ability to repay short term debt.
The senior unsecured debt obligation of AngloGold’s guaranteed subsidiary was also upgraded to Baa2, the statement added.
According to the Johannesburg-based miner with operations in Ghana, the upgrades were “in recognition of significant improvements in the company’s balance sheet position and operational performance”.
Giving details, the world’s third-largest gold producer said Moody’s cited operating improvements, including at AngloGold Ashanti’s Geita mine in Tanzania, where the Project ONE helped the mine achieve higher production in 2011 of 498,000oz at a total cash cost of $536/oz, compared to a low of 264,000oz at $728/oz in 2008.
The Project ONE business improvement initiative at its portfolio of 20 operations in 10 countries, on four continents, aims at enhancing productivity, efficiency and shareholder returns.
Moody’s also pointed to improvement at the Obuasi mine in Ghana, where cash generation after all capital expenditure contributed $39 million in 2011, from a cash drain of $94 million in 2008, according to the statement.
“The Moody’s upgrade of our international investment grade rating further strengthens our ability to execute our strategy to grow the business over the medium term,” said AngloGold Ashanti Chief Financial Officer Srinivasan Venkatakrishnan.
AngloGold Ashanti reported net debt of $610 million at the end of 2011, compared with earnings before interest, tax and depreciation (EBITDA) of $3 billion for the year.
By Ekow Quandzie