Following gold miners Gold Fields and AngloGold Ashanti’s announcement last year that they intend to enter into a joint venture (JV) in Ghana, the companies have advised of not yet having received the approvals required by the government, despite constructive engagement.

The parties in March 2023 agreed on key terms for a proposed JV between Gold Fields’ Tarkwa mine and AngloGold’s Iduapriem mine, including to combine the two neighbouring mines into one single managed entity to extend the life-of-mine, increase production and lower costs.

In the absence of requisite approvals from the Ghana government and the clear timelines for execution of the agreement, the companies have announced they will maintain engagement in relation to a potential asset combination while separately continuing to pursue improvements to their respective assets.

The parties will keep shareholders updated on any significant developments related to the proposed JV.

AngloGold is also in the process of acquiring Egypt-focused mining company Centamin, with shareholders having approved the transaction in October. The takeover is expected to be completed towards the end of November, which will add the world-class Sukari mine to AngloGold’s portfolio.

Meanwhile, AngloGold reported its strongest gold production quarter of the year from managed operations in the three months ended September 30.

The group produced 657 000 oz of gold in the quarter, compared with output of 676 000 oz in the same quarter of last year, owing to lower grades from the Kibali JV with Barrick Gold Corp.

Lower grades resulted in the production of 71 000 oz at the operation compared with 99 000 oz in the prior corresponding quarter.

AngloGold’s output for managed operations increased by 2% year-on-year in the quarter under review to 586 000 oz, from 577 000 oz in the prior comparable quarter.

The company says gold production was particularly stronger at the Obuasi, Siguiri, Tropicana, Cerro Vanguardia and Sunrise Dam mines.

The group’s mines are based in Ghana, Guinea, Tanzania, Brazil, Argentina and Australia.

The Obuasi mine recorded a 15% year-on-year increase in output in the quarter as total grades and underground tonnages rose despite impacts to production owing to reduced mining flexibility in Block 8 and difficult ground conditions in higher grade slopes.

Moreover, the group’s Australian portfolio recovered well from rains and flooding in the first quarter of the year, while the operational turnaround being undertaken at its Brazilian operations continued to gain momentum with AngloGold having resumed processing of gold concentrate at the Queiroz plant in September.

The group posted an overall 339% increase in adjusted earnings before interest, taxes, deprecation and amortisation in the reporting quarter to $746-million, compared with adjusted Ebitda of $170-million in the prior comparable quarter.

AngloGold also generated free cash flow of $347-million in the quarter under review, from $20-million of free cash flow generation in the same quarter last year – marking a 17-fold increase.

“Tight control of costs and active management of our working capital means that that higher gold price has flowed through to our bottom line. We are looking for additional improvements to production and margins to ensure we deliver an even stronger fourth quarter and continue to capitalise on this healthy gold price environment,” says CEO Alberto Calderon.

Headline earnings of $236-million, or $0.56 apiece, in the third quarter compare with a headline loss of $194-million, or $0.46 apiece, posted in the prior comparable quarter.  

The average gold price received per ounce for the group increased by 28% year-on-year to $2 449/oz during the reporting quarter, from $1 908/oz in the prior corresponding quarter.

“A solid overall performance from AngloGold Ashanti’s managed operations helped the company deliver a strong cash cost performance despite persistently high inflation across several of its operating jurisdictions,” Calderon states.

The group’s total cash costs per ounce increased by 8% year-on-year to $1 172/oz, while total cash costs per ounce for managed operations increased by 3% year-on-year to $1 186/oz, Calderon says demonstrates disciplined and consistent focus on costs despite inflationary pressure across its operating jurisdictions and the impact of higher royalties paid, driven by the increase in the gold price.

AngloGold maintains its full-year production guidance of between 2.65-million and 2.85-million ounces.

CAPITAL PROJECTS
AngloGold’s capital expenditure for the full-year is expected to be between $1.13-billion and $1.36-billion.

Its major capital projects include the Havana underground project at the Tropicana mine, in Australia, with development of the Havana portal and decline having started in the reporting quarter.

Commercial production from the project is planned for the first quarter of 2027.

A renewable-energy project at Tropicana is also largely on track despite a rain event at the end of the first quarter of this year, which impacted the site works and equipment transport to site.

Mechanical completion of the solar farm was achieved in the second quarter. Electrical installation is ongoing and the solar system is expected to be commissioned in the fourth quarter of this year.

All the wind turbine components are on site, and the construction crane arrived in October.

In Nevada, AngloGold’s North Bullfrog project achieved the 30% engineering milestone at the end of the reporting quarter, which aligned with the planned schedule. Permitting for the project remains in progress.

The project proposes an openpit mining alternative employing both gravity milling and heap leaching for ore processing. North Bullfrog will be AngloGold’s first commercial operation in Nevada and is expected to produce 117 000 oz/y of gold in the first five years of production and an average 62 000 oz/y over its lifetime of 13 years.

Additionally, AngloGold’s exploration-stage Merlin project, also in Nevada, is in the early stages of prefeasibility development, with the company focusing on analysing various development options while it conducts resource definition drilling.

The company expects to complete a prefeasibility study by the end of 2025.