AngloGold targeting rich DRC resource AngloGold Ashanti was fast-tracking exploration and targeting a five-million-ounce gold resource in the Democratic Republic of Congo (DRC), COO for Africa Neville Nicolau told the Mining Indaba in Cape Town yesterday. He said the DRC opportunity would be both open-pittable and underground.
In terms of future growth, he said that AngloGold's exploration projects were currently focused on concession 40 in the northeastern part of the DRC.
Initial drilling in a 1 500 ha area supported estimates of 1,2-million ounces at 9,9 g/t.
He emphasised the large area that had still to be explored.
He outlined that Anglogold Ashanti's strategy was composed of three key Parts, the first being to defend profit margins, the second to optimise existing orebodies and the third to replace production ounces.
When applied to African operations, progress was being made on all three fronts. The effectiveness of cost-saving initiatives in South Africa in terms of operational efficiency, restructuring and procurement, including escalation management, had resulted in total savings in 2005 of R342-million.
The company planned to roll out its cost-management successes that had been realised in South Africa across the rest of the continent.
By focusing on the top 15 spend items that accounted for 68% of the $940-million spent on the continent, he expected to realise gains of between 8% to 12% in the next 18 to 24 months.
The optimisation of existing orebodies was one of the most strategically important tenets of AngloGold Ashanti's approach to managing, particularly given the significance attached to its three key assets of Geita, Obuasi Deeps and Siguri, each of which had in excess of 15 years of life.
In all three of these cases, these assets were being taken through their current transition phase to optimal performance levels.
“These are long-life assets, all operations that will serve us well into the future,” he said.
They also came with highly-prospective brownfield exploration opportunities, which were currently being exploring to further maximise the life and quality ounces of these assets.
Given the nature and degree of AngloGold Ashanti's investment in Africa, he said that the company recognised its obligation to maintain and enhance a social licence to mine.
This was being fulfilled in three broad categories of contribution, namely constructive community engagement, facilitating local economic development and implementing sustainable community development, particularly in the areas of health and education.
An 'effective' multistakeholder discussion had been introduced at mines in Mali, where an annual stakeholder forum brought together representatives of the community, nongovernmental organisations (NGOs), employees and local government to organise the development needs and assign responsibilities.
This had proved to be highly effective.
“We hope to roll-out this model throughout our African communities.” Nicolau said.
An excellent example of efforts to stimulate local and economic development around mines was the hand-in-hand initiative in Ghana, where a locally-based NGO was facilitating development of entrepreneurial skills and micro-credit schemes.
This was to keep communities financially secure for a long time after operations had ceased.
The third leg of social licence to operate was seeking solutions to community health concerns throughout Africa, malaria being the biggest problem in some areas and HIV/Aids the biggest in South Africa.
The malaria management programme in Mali had been highly successful.
AngloGold Ashanti as a company derived 78% of its production and 65% of its cash profits from Africa, the continent that also hosted one of the most promising greenfield properties in the DRC and a good proportion of various browfield exploration areas, particularly those surrounding operations in Ghana, Guinea and Tanzania.
In order to optimise African presence, several management changes were allowing challenges to be addressed and benefits of operating on a large-scale on this continent harnessed, particularly because 16 of AngloGold's 21 operating assets were on the African continent.
Most recently it restructured its management of the continent from the previous regional structure into two groups, firstly taking in the openpit assets of Mali, Guinea, Tanzania, Namibia and Ghana, which were incorporated in the openpit region under the leadership of Fritz Neethling, while the deep level South African and Obuasi operations now fell under under Robbie Lazare.
This ensured that technical skills were appropriately matched and to allow deep-level technical specialists to exert more direct influence on the development of Obuasi.
The new structure would allow the company to capitalise on the synergies, particularly the asset types that were available to a company of AngloGold's size, as well as allow better management of its social licence to mine in these countries.
In sharing the stage with Barrick, Nicolau said that he felt like the ant and the elephant standing on a bridge and the ant saying to the elephant, “We really are shaking this bridge. I think that you will find the length of this short presentation, compared to that of just before me, Barrick, one that is directly proportional to our respective market capitalisations,” he quipped.
MOE Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
