AngloGold lifts force majeure on Obuasi

FILE PHOTO: A worker pours gold at the AngloGold Ashanti mine at Obuasi, Ghana

FILE PHOTO: A worker pours gold at the AngloGold Ashanti mine at Obuasi, Ghana

Published Feb 21, 2017

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Johannesburg - AngloGold Ashanti

lifted force majeure on its Ghanaian Obuasi mine on Tuesday

after the removal of thousands of illegal miners but said it was

too early to determine the extent of damage to the loss-making,

mothballed operation.

The move is significant for AngloGold, which has said it

could sell or redevelop the mine. It also cheered investors by

saying it would resume dividends after returning to profit in

2016 thanks to a higher spot gold price and weaker currencies.

AngloGold's shares were 2 percent higher after it posted

2016 headline earnings of $111 million, from a $73 million loss,

and said it would pay a dividend of 130 South African cents per

share after a three-year hiatus.

Obuasi is potentially rich in ore, with high grades of 7

grammes per tonne and AngloGold should now be able to proceed

with its timetable for a pre-feasibility study for the

government on what to do with the asset.

An invasion by illegal miners, who at one stage numbered

12 000, had made Obuasi a toxic asset and underscored the social

and political risks of Africa mining.

Earlier this month AngloGold told Reuters the mine had been

largely cleared by Ghana's military.

CEO Srinivasan Venkatakrishnan, who is known as

Venkat, told Reuters it was too early to say if equipment had

been stripped or damage inflicted as AngloGold had to ensure

support structures were sound before sending inspectors in.

The condition of the mine would be crucial to deciding on

what to do with it. Mandi Dungwa, investment analyst at Kagiso

Asset Management which holds some AngloGold shares, said a

disposal or redevelopment "would be a key value driver".

"Obuasi is still a significant portion of reserves and

resources for AngloGold, forming approximately 10 percent of

reserves at a $1100 gold price assumption," Dungwa added.

Although illegal mining is still going on within the

boundaries of the Obuasi concession, Venkat said he was

confident this would be resolved because of the pro-business

attitude of Ghana's new President Nana Akufo-Addo.

"What gives us the biggest dose of confidence is the new

government in Ghana," he said.

REUTERS

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