Tropicana a golden prospect amid forcible cost cuts

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 23 Aug 2013   Posted by admin


THE world’s third largest gold producer AngloGold Ashanti will bring its promising new WA gold mine Tropicana into production earlier than expected, despite stringent company plans to cut costs by up to US$500 million.
In a 70:30 joint venture with Independence Group, primary owner AngloGold Ashanti is preparing to ramp up Tropicana Gold – a new project celebrated for its ‘enormous’ total estimated resources of up to 7.89 million ounces of gold.
Lying 330km east-northeast of Kalgoorlie in Laverton WA, Tropicana Gold was originally forecast to begin production in December 2013. With commissioning already underway, the tailings facility completed and an operating team mobilised on site, Tropicana is now expected to produce first gold in the September quarter. Ramp up is expected in the December quarter.
If developed to its full potential, Tropicana stands to become one of Australia’s top five gold mines in terms of gold production volume: the project is forecast to produce as much as 490,000oz of gold a year at a cash cost of between $590 and $630/oz of gold.
However, this news was released in conjunction with reports stating the company aimed to ‘more than halve’ its production costs by mid 2014.
AngloGold Ashanti announced it would sever around 1800 corporate level positions across the next 18 months.
The company also announced plans to narrow its overall exploration and evaluation programs.
Although the South African-based company currently holds 21 operations across 10 countries, new managing chief executive Srinivasan Venkatakrishnan stated AngloGold Ashanti would act to reduce this to three core areas.
“We will withdraw from more than a dozen countries and will focus on our three most prospective regions — Tropicana [WA], Colombia and the Siguiri region in Guinea — while also continuing to aggressively advance the underground technology push in South Africa,” Mr Venkatakrishnan said.
AngloGold Ashanti’s executive vice president Australia, group planning and technical Graham Ehm concurred, stating the company aimed to save $500 million in capital costs across the next 18 months, with capital expenditure directed towards the group’s highest quality assets.
However, he told Bloomberg that Australia remained a top investment priority, with the company evaluating Australia’s prospects, including those on offer by the world’s largest gold producer Barrick Gold.
“Australia is a pretty good base,” Mr Ehm said at the Diggers & Dealers conference in Kalgoorlie.
“If you’ve got a good base then you continue to invest in that base.”