Accra, Ghana — MININGREVIEW.COM — 12 August 2008 – AngloGold Ashanti CEO Mark Cutifani is reported to have hinted that the world’s third largest gold producer would consider all merger and acquisition options, including a takeover deal by a rival.
Quoting a Reuters report from the Ghanaian capital, allAfrica.com says that when Cutifani was asked if AngloGold would consider a takeover deal by another company, he replied: “Of course, you have to consider. We have to do the right thing by our shareholders. And if at the end of the day, the opposition starts to wake up – and somebody wants a piece of the action – of course we have to consider it.”
Bloomberg reports that a takeover of the AngloGold Ashanti could also lead to a change of identity, and for Ghanaians, the loss of the trademark Ashanti in a new-merged company could re-ignite the debate over the sale of Ashanti Gold to AngloGold.
Cutifani said a lack of cash and capital among some miners could pressure near-term gold production. “I still think we have an industry that’s under stress. We have seen declining production in the last six years, and we will probably see production decline in the next three to five years continuing, because there hasn’t been enough investment,” he added.
Cutifani predicted that AngloGold gold output in the third quarter would rise to 1.27 million oz from 1.25 million oz in the second quarter. He expected full-year production of between 4.9 and 5.1 million oz.
Looking forward, he said the price of gold had an “absolutely” good chance of trading above the $1 000/oz mark at year end, and that this explained why AngloGold had decided to buy back its hedge book.
On the other hand, Cutifani said that AngloGold shares were “terribly undervalued” and trading at a significant discount to the rest of the market.