AngloGold Ashanti who owns Navachab Gold Mine will soon go under the hammer have released a sterling set of results despite recent dips in the gold price.
The company that has also not been experiencing the best of days in their Namibian operations are eager to sell off their share in the Navachab which was dogged by industrial unrest early this year.
The results were released this week after Giyani Gold, Vedanta Zinc International Group and B2Gold Corporation presented their bids to acquire Navachab.
AngloGold Ashanti chief executive officer, Srinivasan Venkatakrishnan, said the company’s performance in different countries including Namibia have floated above the waters despite the gold industry experiencing challenging circumstances in the recent past.
“It’s been a strong performance in a challenging environment from our operators and from the teams developing our two new high-quality projects.
“In light of the $220/oz (appr N$2200) drop in the average quarterly gold price which will negatively impact our second quarter results, we have moved decisively on all fronts to sharpen our focus on efficiency and to tighten up on costs, overheads and capital,” Venkatakrishnan said.
AngloGold Ashanti is the world’s third-largest gold producer, with 21 operations in 10 countries including Namibia, Democratic Republic of Congo (DRC), South Africa and Australia as well as a portfolio of exploration assets.
In addition to its existing portfolio, two new mines – Tropicana Joint Venture in Australia and the Kibali Joint Venture in the Democratic Republic of Congo - are scheduled to start production before the end of this year.
However, despite such promises on its operations elsewhere Namibia has not been easy both on the operations and production side.
The company reckons to continue to focus on safe and sustainable free cash-flow generation by protecting margins and returns.
"To this end, work is progressing on an initiative which aims to realise savings in both operating and indirect costs as well as sustaining capital expenditure over the next 18 months.
“In light of lower and more volatile gold prices, capital expenditure is being focused on the group’s highest quality assets while curtailing spending or suspending operations at projects that may yield lower returns ," the report noted.
Along with its result announcement, AngloGold has also revealed that it will seek partners for certain projects in different countries to continue improving on their bottom-line.
"Exploration spending is being reduced through a more tightly focused global drilling programme and overhead costs are being significantly rationalised. In line with its commitment to move decisively to remove marginal ounces from its production profile and to optimise free cash-flow generation, AngloGold Ashanti is revising its current mine plans.
“Given this strategy and the prevailing gold price, AngloGold Ashanti’s annual guidance for 2013 is now between 4.0Moz and 4.1Moz, which compares to previous guidance of 4.1Moz to 4.4Moz," the company further noted.
AngloGold also argued that in accordance with the International Financial Reporting Standards (IFRS), the company has reviewed its mining assets carrying value (including ore-stock piles).
"Over the remainder of 2013, all business plans and associated reserves and resources will be revised and optimised to reflect the lower gold price assumptions, associated mitigation measures and management initiatives to improve margins and cash flow.
“In the meantime, using preliminary analysis based on revised forecast gold prices, AngloGold Ashanti expects to book during its second quarter 2013 financial results a charge of US$2.2b – US$2.6b (about N$22b-N$26b) post-tax in relation to impairments and revaluation to net realiable value of its mining assets (including ore stock piles)," AngloGold said.