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AngloGold Ashanti concludes transition of loss-making Ghana mine

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AngloGold AshantiMiner, AngloGold Ashanti says it has completed the transition of its loss-making Obuasi mine in Ghana.

In a news release announcing its fourth quarter 2014 results, issued February 23, 2015 and copied to ghanabusinessnews.com, AngloGold Ashanti indicated that it has ceased underground production at the mine and it is now focusing on “the feasibility study into the redevelopment of the high-grade ore body as a fully mechanised operation”.

It added that the study is nearing completion, following which it will be optimised while discussions with the government and potential funding and operating partners will be held.

The miner noted that it recorded its second consecutive growth in annual production alongside a 13% improvement in all-in sustaining costs, as it continued to focus on portfolio improvements and capital discipline.

According to the release, production rose 8 percent to 4.44Moz at an all-in sustaining cost of $1,026/oz in the 12 months through December 31, 2014, from 4.10Moz at $1,174/oz the previous year.

“The result compared with guidance of 4.2Moz to 4.5Moz at an all-in-sustaining cost of $1,025/oz to $1,075/oz. All-in sustaining cost is a measure that captures direct operating costs, corporate and exploration expenditure and capital investment required to sustain the business,” it stated.

The company noted that despite a 10 percent drop in the average gold price, the company’s adjusted earnings before interest, tax, depreciation and amortisation or EBITDA for the year remained steady at $1.67 billion, while free cash flow, excluding once-off retrenchment costs in Ghana and the Rand Refinery loan, improved to $142 million compared with an outflow of $1.06 billion the previous year.

It indicated that it is pursuing a range of measures to generate cash from internal sources to reduce debt by about $1 billion over the medium term.

“These steps include pursuing additional savings from current operations, realising synergies from combining neighbouring mines and infrastructure in South Africa and potentially introducing partners in key areas, most notably projects in Colombia and in one of its operating assets,” it added.

By Emmanuel K. Dogbevi

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