HomeGoldAngloGold to review capital spending

AngloGold to review capital spending

AngloGold’s Obuasi
gold mine in Ghana
Johannesburg, South Africa — MININGREVIEW.COM — 31 October 2008 – AngloGold Ashanti Limited – Africa’s biggest gold miner – has posted a third-quarter loss and says the global credit crisis was forcing the company to review projects and capital spending, or to sell assets to re-finance a US$1 billion (R10 billion) convertible bond.

Reuters reports that AngloGold – the world’s No. 3 gold producer – has registered an adjusted headline loss per share of 34 U.S. cents for the September quarter, after selling part of its forward sales early. The company has reported a re-stated adjusted headline loss per share of 307 U.S. cents in the June quarter.

The group said it had been hit by the global credit crisis and would seek new ways to refinance the convertible bond, such as bridge financing, asset sales or reviewing capital spending.

Plans to refinance the bond with a new equity-linked instrument would be shelved owing to the global market turmoil, the group said. The group had cash and cash equivalents of  US$555 million (R5.6 billion) and a credit facility of US$294 million (almost R3 billion).

AngloGold – which has around 21 operations across four continents – said production in the quarter rose 1% to 1.265 million ounces. Total costs rose, but they were lower than the group had forecast, the company added.

The group’s Cerro Vanguardia mine in Argentina and the struggling Obuasi mine in Ghana recorded big output jumps, while its South African operations ran at full capacity using only 92.4 percent of electricity owing to a national power shortage.

AngloGold forecast a drop in gold production to 1.25 million ounces in the fourth quarter, and total cash costs of about US$460 an ounce.

An average of estimates by six analysts surveyed by Reuters showed that AngloGold was expected to return to profit, and post adjusted headline earnings per share of 26 U.S. cents.

Analysts had forecast a quick return to profit.