AngloGold’s 2012 Profit Was $924 Million

“We’ve moved decisively to ensure that we continue a strong recovery from a difficult end to last year,” Joint Interim Chief Executive Officer Tony O’Neill said.

Production in 2012 was 3.94Moz at a total cash cost of $862/oz, which included about 235,000oz lost to the strike. The annual production compares to 4.33Moz at a cash cost of $728/oz in 2011. Production in 2013 is anticipated to grow to between 4.1 million ounces and 4.4 million ounces at an improved total cash cost of $815/oz to $845/oz.

“Our focus is on improving margins and delivering returns, rather than production growth, and that will continue to drive our decision making”  and “We have good projects and a solid financial base,” Interim CEO Srinivasan Venkatakrishnan said.

Tony O’Neill has oversight of all operating and exploration functions. Interim CEO Srinivasan Venkatakrishnan has accountability for all financial and corporate matters.

“AngloGold Ashanti continues to deliver the best returns on capital amongst the gold majors, which reflects strict discipline in capital deployment over the past five years” and “That’s been core to our strategy since early 2008, when we outlined our vision for the company, ” Outgoing CEO Mark Cutifani said.

More focused investment in the business has helped AngloGold Ashanti forecast stable capital expenditure of about $2.1bn for 2013, while corporate costs are expected to decline by about 18% to $240m. Expensed spending on exploration and feasibility studies is forecast at about $377m, 18% lower than in 2012.

AngloGold’s 2012 Profit Was $924

Source: anglogold.com

CIBC Institutional Investor Conference: Barrick Gold Corporation "Paradigm Shift In Industry"

“We are only gonna spend money if it makes money for our shareholders,” Barrick Gold Corporation Ammar Al-Joundi, EVP & CFO said.

EVP & CFO Ammar Al-Joundi spoke about Pascua-Lama becoming one of the world’s largest and lowest cost mines(0 to -150 an ounce). Barrick’s Ammar Al-Joundi stated that once Pascua-Lama is in production, Barrick expect’s the mine to contribute significant cash flow to Barrick Gold Investors. Barrick Gold agreed to sell a 25% of the life-of-mine silver production from the Pascua-Lama project to Silver Wheaton at 13 dollars an ounce, totaling $625 million. Silver Wheaton will also buy 100% of the silver produced at Barrick’s Lagunas Norte, Pierina and Veladero mines until the Pascua-Lama mine is completed.

“Paradigm shift in industry; focus on profitability and less emphasis on growth,”  Barrick Gold Corporation Ammar Al-Joundi, EVP & CFO said.

Barrick Gold’s Pascua-Lama has proven and probable reserves of 18 million ounces of gold and 650 million ounces of silver. Barrick Gold Corporation has 6 mines that produce 500,000 gold ounces, 3 mines that produce 800,000 gold ounces and 2 mines that produce over 1,000,000 gold ounces.

Barrick Gold Corporation recently achieved commercial production at its 60 percent owned Pueblo Viejo mine in the Dominican Republic and the company was recently named to the Global 100, a listing of the most sustainable corporations in the world, by Corporate Knights, a Canadian media and investment research company.

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The company announced the creation of a new South African gold mining company through the proposed unbundling of its 100% owned subsidiary, Sibanye Gold Limited (Sibanye Gold), formerly known as GFI Mining South Africa Proprietary Limited (GFIMSA), which holds the KDC and Beatrix gold mines as well as various service companies.

Subject to approval by the JSE and the NYSE, Sibanye Gold will be listed as a separate and independent company on both exchanges in February 2013. Sibanye Gold shares will then be distributed to existing Gold Fields shareholders (whether held in the form of ordinary shares or depository receipts).

Both Gold Fields and Sibanye Gold will be domiciled in South Africa with their primary listing of shares on the JSE and a secondary listing of American depository receipts on the NYSE. The other existing secondary listings on the Swiss, Dubai and Brussels stock exchanges for Gold Fields will remain unchanged.

Following the unbundling, Gold Fields will retain the balance of its current portfolio of assets, including the developing South Deep Gold Mine located in South Africa.

Matthews S Moloko, currently a non-executive director of Gold Fields and executive Chair and Founder of the Thesele Group, will become the non-executive Chair of Sibanye Gold and will step down from the Gold Fields board. Other non-executive directors will be Jerry Vilikazi, Chair of Palama and former CEO of Business Unity South Africa, Rick Menell, a non-executive director of Gold Fields, and Keith Rayner, CEO of KAR Presentations, who will also chair the Audit Committee. Two further HDSA directors will be appointed in due course. Cain Farrel, the current Company Secretary of Gold Fields, will become the new Company Secretary of Sibanye Gold.

Neal Froneman, currently Chief Executive Officer of Gold One, will become Chief Executive Officer of Sibanye Gold and Charl Keyter, currently Head of Finance for Gold Fields’ international operations, will become the Chief Financial Officer of Sibanye Gold.

Peter Turner, the Executive Vice President for Gold Fields’ South Africa Region as well as the rest of the executive team for the Region (excluding those dedicated to South Deep), and the senior operational management teams of the KDC and Beatrix gold mines, will remain with Sibanye Gold.

Dr Mamphela Ramphele will continue to chair Gold Fields, Nick Holland will remain Chief Executive Officer and Paul Schmidt will remain Chief Financial Officer.

The separation of Gold Fields and Sibanye Gold will enable the two independently governed and managed companies to focus on their respective strategic goals and to operate more effectively as separate entities, to the benefit of shareholders, employees and communities.

Holland says: “While some parts of the GFIMSA operations have been in production for as long as 70 years, these assets still have inherent quality and extensive resource and reserve potential. The separation will liberate Sibanye Gold into a fit-for-purpose, sustainable gold mining company best positioned to maximise long-term value for stakeholders.

“By unbundling the cash-generative KDC and Beatrix mines into Sibanye Gold, its cash flows can be utilised to extend the life of the mines and improve dividend payouts to shareholders. The first priority, however, will be to achieve stable and safe production,” Holland says.

Froneman says that the company will be committed to maintaining profitable, stable and low cost operations that provide a high degree of leverage to the gold price. “We will selectively pursue synergistic opportunities for consolidation in the South African gold industry and, as a separately listed entity, will be able to fully utilise our free cash flows for the benefit of the Company and its stakeholders,” he says.

There will be no job losses directly as a result of the creation and unbundling of Sibanye Gold. In addition all conditions of employment will remain unchanged.

Sibanye Gold has committed itself to both continuing and enhancing Gold Fields’ sustainable development, labour relations, transformation and other BEE policies. “The ability to preserve employment in deep level gold mining by extending the life of mines will depend on effective co-operation between management, trade unions and the workforce,” Froneman comments.

Sibanye Gold will therefore develop policies which will incentivise its workforce to benefit from the success of the business through a profit-sharing scheme as well as continued investments into improved living conditions that will improve the lives of employees.

Foremost amongst these, Sibanye Gold will continue to invest significantly in the transformation of accommodation arrangements for its employees. More than R700 million has been committed to upgrading accommodation arrangements at the KDC and Beatrix gold mines between 2009 and 2014, of which approximately R500 million has been spent to date on building 700 new homes and reducing hostel room density from an average of 8 persons per room in 2006 to an average of 1.4 per room in September 2012. This work will continue.

Sibanye Gold will continue to pursue sound environmental policies and practices and honour its obligations and commitments in this regard, all of which are funded through contributions to statutory and regulated environmental trust funds and associated guarantees for each operation.

Following the unbundling, Gold Fields will focus on cash flow generation, more predictable dividend pay-outs and growth through the expansion and life extension of its existing mines in Ghana, Peru and Australia, as well as realising value from its world-class portfolio of development and exploration projects.

“The South Deep project is core to our expansion plans and we will continue to invest in this operation to secure the ramp-up to 700,000 ounces per year,” Holland says.

He adds: “Gold Fields’ shareholders should continue to enjoy amongst the highest dividend yields in the sector, due to our policy of ensuring that dividends have the first call on cash flows and distributing between 25% and 35% of normalised earnings to shareholders.”

Based on the results for the 12-month period ended December 2011 Sibanye Gold’s gold production was 1.4 million ounces making it one of the largest domestic gold producer in South Africa. Sibanye Gold’s unaudited revenue for the 2011 financial year amounted to R16.6 billion with unaudited earnings before interest, tax, depreciation and amortisation (“EBITDA”) of R6.8 billion, as extracted from the audited consolidated Gold Fields financial statements for the financial year ended 31 December 2011.

Gold Fields’ production (excluding Sibanye Gold) for the 12 months ended December 2011 was 2.2 million gold-equivalent ounces and its mineral reserves, as at 31 December 2011, were 64 million ounces, comprising 40 million ounces at South Deep and 24 million ounces at the international operations. Gold Fields’ unaudited revenue for the 2011 financial year (excluding Sibanye Gold) amounted to US$3.5 billion with unaudited EBITDA of US$2.0 billion, as extracted from the audited consolidated Gold Fields financial statements for the financial year ended 31 December 2011.

The mineral reserve positions at 31 December 2011 were 22 million ounces for Sibanye Gold and 64 million gold-equivalent ounces for Gold Fields, comprising 40 million ounces at South Deep and 24 million ounces at the international operations.

Sibanye Gold will retain Gold Fields’ South African net debt of approximately R4 billion, while approximately US$1.4 billion of offshore net debt will be retained by Gold Fields.

The transaction will be effected through a 1:1 distribution of Sibanye Gold shares (in the form of shares or American depositary receipts (“ADRs”) to existing Gold Fields’ shareholders (whether held in the form of shares or depository receipts).

The listing of Sibanye Gold is scheduled for mid-February 2013 and existing Gold Fields’ shareholders will then hold two separate shares or ADRs, namely the newly distributed Sibanye Gold shares or ADRs as well as their original Gold Fields shares or depositary receipts (as the case may be).

The transaction does not require shareholder approval and the listings have been approved by the South African Reserve Bank.

A full pre-listing statement will be released in mid-January 2013.

SOURCE: Gold Fields Limited

]]> http://woodlawnpost.com/?feed=rss2&p=67964 0 http://woodlawnpost.com/?p=67666&utm_source=rss&utm_medium=rss&utm_campaign=african-barrick-tanzania-renews-north-mara-special-mining-licences http://woodlawnpost.com/?p=67666#comments Mon, 26 Nov 2012 21:02:12 +0000 WoodlawnPost http://woodlawnpost.com/?p=67666 LONDON - ABG is Tanzania’s largest gold producer and one of the five largest gold producers in Africa. The company reported that it had received the renewals of its special mining licences (SMLs) at its North Mara project, in Tanzania.

North Mara

Renewal of North Mara Special Mining Licences

• Renewed on existing terms and conditions and for a 15 year period
• Important milestone for the long-term future of the operation

The original North Mara SMLs were issued in February 2000 and had expired in September 2011, since which time the mine had continued to operate on the same basis owing to the rollover provisions contained in the Tanzanian Mining Act.

 “The renewal of the North Mara SMLs represents an important step in providing a stable platform for future investment into one of our core assets,“ CEO of ABG, Greg Hawkins said.

Since the issue of the original SML 12 years ago, the mine had produced over 2-million ounces of gold and had a further 3.5-million ounces of gold remaining in reserves. The company’s SML 17/96 has been enlarged twice and now covers an area of 31.3 km2, including both the Gokona and Nyabigena pits. Its other licence, SML 18/96, had been enlarged six times and now covers an area of 10.5 km2, including the Nyabirama pit.

“We have worked closely with the government over the past 18 months in order to achieve the first renewal of a special mining licence in Tanzania under the Mining Act 2010, and this highlights their focus on ensuring there is a positive investment climate for Tanzania,” commented African Barrick CEO Greg Hawkins said.

The Rustenburg strike in January and February, effected South Africa’s platinum, gold and iron ore mines this year. At Rustenburg, the company said “operational performance continues to be impacted by the uncertain labour climate and as a result still remains well below planned levels.”

The JSE-listed company produced 454 000 oz of platinum during the three months to September 2012, compared with 388 000 oz in the corresponding quarter the year before.

In its 2013 financial year first-quarter production report, Implats attributed this to a once-off toll material processing and an inventory release, which offset the lower production at its Rustenburg operations owing to a prolonged ramp-up.

PRODUCTION

Gross platinum production increased by 17% to 454 000 ounces for the quarter compared with the corresponding period a year ago. Lower production at Rustenburg due to the prolonged ramp-up was more than offset by once-off processing of toll material and an inventory release following the build-up in the latter part of the previous financial year.

Impala

Mill throughput and grade declined by 14% and 6% to 3.2 million tonnes and 4.24 g/t respectively. This coupled with a 12 000 ounce smelter build-up resulted in refined platinum production falling by 22% to 193 000 ounces.

Operational performance continues to be impacted by the uncertain labour climate and as a result still remains well below planned levels. The ramp-up to full production which was anticipated to be completed by the end of the first quarter has not been achieved. Currently the mine is operating at between 80 to 85% of FY2011 production levels. A number of key initiatives have been launched to improve mining quality factors and lower than planned development rates.

Marula

Tonnes milled at Marula rose by 4% to 409 000. However, a 2% decline in head grade to 4.22 g/t due to lower production from the relatively higher-grade Clapham conventional section due to conveyor belt disruptions resulted in platinum production in concentrate remaining unchanged at 18 000 ounces.Zimplats

The planned shutdown of the smelter during August and September for routine maintenance resulted in platinum production in matte falling by 11% to 40 000 ounces. The Phase 2 expansion to 270 000 ounces of platinum has been slowed as a result of the recently implemented capital preservation measures and will now be completed in 2015.

Management remains in negotiation with the Government of Zimbabwe on the finalisation of the agreed indigenisation plan. As previously announced the company received a revised Income Tax assessment for the period 2007 to 2012. This assessment disallowed the claiming of capital expenditure in full in the year incurred as set out in the Special Mining Lease on the basis that the legislation to give legal effect to this matter had not been promulgated. An amount of US$33.2 million will be paid over the twelve month period commencing October 2012. The company has lodged an objection to the additional payment of penalties and interest.

Mimosa

An increase in both tonnes milled and grade resulted in a corresponding improvement in platinum production in concentrate to 28 000 ounces. This remains in line with steady-state refined production of 100 000 ounces of platinum. Discussions are ongoing regarding Mimosa’s proposed indigenisation plan.

IRS

Throughput at IRS increased by 88% to 261 000 ounces of platinum despite a further decrease in non-managed purchased production. This was due to the treatment of a significant amount of once-off toll material compared to none in the corresponding period a year ago.

Group Unit Costs

The unit cost per platinum ounce continued to be adversely effected by inflation and lower volumes, and rose by approximately 35% to R15 326. The combination of wage pressures in South Africa and a weaker Rand in Zimbabwe accounted for the bulk of the 15% increase in cash costs, while the balance was primarily due to lower volumes, as a result of the protracted ramp-up in production and poor mining quality at Impala Rustenburg.

Source: www.implats.co.za/

The Company (Harmony) kicked off its new financial year in style posting a R1.4bn September quarter operating profit, a 9% increase quarter-on-quarter, but said strike action as its Kusasalethu mine near Carletonville would trim 25,000 ounces off its full-year production target of 1.3 million oz.

Gold production from underground operations was 9% higher than the prior quarter, mainly driven by improved grade. Cash operating costs increased quarter on quarter, mainly due to two months of winter electricity tariffs and labour increases implemented on 1 July 2012. This resulted in the rand per kilogram unit cost increasing by 6% from R278 091/kg in the June 2012 quarter to R294 404/kg in this quarter. The rand gold price received during the quarter increased by 5% from R421 565/kg in the June 2012 quarter to R440 868/kg in the September 2012 quarter.

Headline earnings per share increased quarter on quarter to 123 SA cents (15 US cents).

Graham Briggs, chief executive officer of Harmony commented, “The Company continues to generate strong cash flows, with low debt and undrawn lending facilities. Our first quarter results reaffirm that Harmony is guided by a clear strategy and expert management teams delivering sustainable and competitive results.”

Source: randgoldresources.com/

The Australian-born CEO wants to improve the company’s ability to investment against key rivals such as Newcrest Mining by the creation of a locally listed subsidiaries. Headquartered in Johannesburg, South Africa, AngloGold Ashanti has 20 operations in 10 countries on four continents. The CEO of AngloGold Ashanti wants to raise investor value, and expand the company’s gold production in more stable political environments based on the companies South African operations severely hampered this year by strikes.

AngloGold Ashanti’s South African operations accounted for approximately 32% of total group production during the first half of the year.

The production for the three months to September 30 2012 was 1.03Moz, which compares with guidance for the period of 1.07Moz to 1.10Moz at a unit total cash cost of $835/oz and $865/oz. The lower-than-expected production level was primarily due to continued labour unrest in South Africa and lower-than-anticipated production at Obuasi.

In Australia, Newcrest has Cadia Valley Operations (CVO) which is one of Australia’s largest gold mining operations and is 100% owned by Newcrest. In the financial year ending 30 June 2012, CVO produced 473,195 ounces of gold. From 1999 (when production started) to 30 June 2012, CVO has produced more than 7.1 million ounces of gold.

AngloGold, the world’s third largest gold producer, currently has two major mining interests in Australia with plans to establish a third via either exploration or consolidation.

“AngloGold Ashanti is well positioned… in terms of the assets we have… to play an important role, both as a miner and as a key economic agent in many of these countries…” Tito Mboweni Chairman said about the companies annual financial statments.

The company’s Sunrise Dam goldmine in Western Australia produced 250,000 ounces of gold and USD$385 million in revenue during 2011 despite heavy rains, while AngloGold also holds a 70% stake in the Tropicana project under development in the same state, which is expected to generate 470,000 – 490,000 ounces of gold per year during its first three years of operation.

According to Cutifani an Australian spin-off could possibly be worth several billion dollars but is unlikely to take place until 2014, after the company implements production targets of 5 million ounces globally and 1 million ounces in Australia.

According to the Australian AngloGold’s head Mark Cutifani said that he had fielded the idea before Australian investors during a trip to the country last week.

Gold One lowered its 2012 production outlook to 243,171 oz, from 250 000 oz. The South African gold mining company lowered its guidance for the December quarter to 59,000 oz, from 70,000 oz.

September 2012 Quarterly Results

• 59,642 ounces gold production 
• Negative cashflow from operations of US$ 9.19 million 
• Group operating cashflow of US$ 7.81 million 
• Group cash balance increased by 28% primarily due to a US$ 25 million shareholder loan 
• Group cash costs of US$ 1,318/oz 
• Gold Fields and Gold One West Rand Tailings Joint Venture scoping study to be progressed to pre-

feasibility study

Junior gold miner Gold One has signed a two-year wage deal with the National Union of Mineworkers for employees at its Modder East mine in South Africa, the company said on Wednesday. Salaries will be increased by 10 percent for category A and B lower employees and by 8 percent for B upper employees.

Group gold revenue for the September 2012 quarter amounted to US$ 87.89 million from the sale of 55,995 ounces at an average price of US$ 1,570/oz. This comprised 36,150 ounces of gold sold into the spot market at an average price of US$ 1,662/oz and 19,845 ounces delivered into the hedge book at an implied average price of US$ 1 166/oz. A possible restructuring or cash settlement of the ex-Rand Uranium (Pty) Limited (“Rand Uranium”) hedge was considered during the quarter under review to improve the Cooke Underground Operations’ profitability in the short term. It was, however, decided that, at this stage, it would be optimal to continue delivering into the hedge as the monthly commitments become due. This will carry on through to the end of the hedge commitments in June 2013.

Source: www.gold1.co.za/

East Africa’s 2nd biggest economy argues it is not seeing the fruits of soaring commodity prices, in particular gold and the government plans to increase the mining sector’s contribution to the economy to 10% of GDP by 2025 from 3.3% last year.

AngloGold Ashanti owns the biggest gold mine in Tanzania. The Geita mine recorded revenues in excess of $4.2-billion over the past decade and paid $683-million to the Treasury during the period in corporate tax, royalties, withholding taxes, payroll taxes and other fees, Davies said.

“Last year we produced 494 000 oz and we are looking to be in a similar range this year,” he said.

The Tanzania’s Energy and Minerals Ministry declared in July that all mining companies had agreed to pay the new royalty rate from May and said the government would keep mining contracts under review in a bid to deepen their economic contributions.

The details of the new passed mining legislation include a rise in royalties on gold exports to 4% of gross value from 3% of netback value. The law also required mining companies to pay the government 0.3% of their annual turnover, up from the previous requirement of a maximum $200 000 a year.

AngloGold Ashanti told Reuters it expected the Dodoma government to respect its mineral development agreement, which it said was a legal contract signed before the new mining legislation was put in place.

“Our investors obviously expect that those contracts should be honoured because they’ve made an investment for the long term,” Gary Davies, managing director of AngloGold’s Geita gold mine said in an interview.

“What’s key is that the goal posts are stable because otherwise investors will need to factor that into their investments. I think any investor would be concerned about that, we are no different.”

Laurent Coche, AngloGold’s senior vice-president for sustainability in Africa, said the company wanted talks with Tanzania about how to boost growth of the mining sector.

Headquartered in Johannesburg, South Africa, AngloGold Ashanti has 20 operations in 10 countries on four continents, as well as several exploration programmes in both the established and new gold producing regions of the world with reported production for the three months to September 30 2012 of 1.03 million-oz at a unit total cash cost of $835/oz and $865/oz.

“There is also a need to distinguish between the short-term issues and long-term issues. We would be willing to be part of a conversation around developing the country’s mining vision … looking at 20 or 30 years down the road,” Coche told Reuters.

African Barrick Gold’s Tulawaka gold mine and Resolute Mine’s Golden Pride mine are both expected to close down in mid-2013 after depleting their reserves.

Source: Reuters