JOHANNESBURG (miningweekly.com) – The surface operations of gold mining company AngloGold Ashanti have restarted on a limited basis following the granting of recommencement permission by South Africa’s Department of Mineral Resources and Energy.

The company said in a media release on Wednesday that the restart involved the processing of marginal ore dumps at the West Wits Operations, and the reclamation of tailings at the Mine Waste Solutions business unit, in the Vaal River region.

The 500 employees, spread across both the West Wits and Vaal River region, who had facilitated the restart since April 6, represented less than a third of the usual staff complement for these business units, and roughly 8% of AngloGold’s total South Africa workforce.

All sites had the requisite Covid-19 risk management plans in place.

The limited restart would help to safeguard technical infrastructure and enable a safe, quick resumption of all remaining operations once the lockdown ended, the company stated in its release to Mining Weekly.

In 2019, the marginal ore dumps business produced 70 000 oz at an all-in sustaining cost (AISC) of $1 272/oz and Mine Waste Solutions produced 106 000 oz at an AISC of $894/oz.

Production from the Mponeng underground operation would likely remain suspended until the scheduled April 30 lockdown termination.

Mponeng, which is being acquired by Harmony Gold along with the surface assets, was now the only one of AngloGold Ashanti’s 14 operations where production remained suspended.

In recognition of the significant global challenge presented by Covid-19, the company was working closely with governments and civil society groups in each of its operating jurisdictions to help slow the spread of the virus, mitigate the risks of infection, ensure the sick received treatment and lessen the economic impact caused by necessary government measures to slow its spread.

Throughout this process, it would continue to prioritise the safety and health of its employees and host communities.

This update provided details on the restart of suspended production in Argentina, Brazil and South Africa and highlighted the affirmation of its credit rating by Moody’s and its repayment of the company’s now-matured ten-year, $700-million bond.

A diverse portfolio and proactive balance sheet management had afforded the company financial flexibility during this unprecedented time.

“We’re focused on the health of our employees and our communities, while ensuring we have the ability to contribute meaningfully to a range of vital public health and economic initiatives in each of our operating jurisdictions,” AngloGold CEO Kelvin Dushnisky emphasised.

UPDATE ON OPERATIONS IN LATIN AMERICA

In Argentina, its sole Cerro Vanguardia gold mine had ramped up capacity after restarting milling operations on April 6. It would initially process stockpiles, allowing production to remain near planned levels with a significantly smaller staff complement. The mining operation had been suspended since March 21 as a result of countrywide Covid-19-related restrictions on travel and border closings. In 2019, Cerro Vanguardia produced 225 000 oz at an AISC of $859/oz.

In Brazil, operations had resumed at Mineração Serra Grande based on the municipality decree and the Mining Minister’s federal ordinance. Ramp-up of production began on April 5 following its suspension on March 27 in response to measures taken by local authorities to limit the spread of Covid-19.

In 2019, Serra Grande produced 123 000 oz at an AISC of $1 105/oz.

In each case, the resumption of operations had occurred alongside stringent screening, hygiene, physical distancing and other measures designed to mitigate the risk of infection.

Operations in the state of Minas Gerais in Brazil had been ongoing, as was the case in Australia, Tanzania, Democratic Republic of Congo, Guinea, Ghana and Mali. Exploration work in the US had been suspended and updates would be provided as changes occurred.

MOODY’S AND BOND REPAYMENT

Moody's Investors Service had affirmed its Baa3 credit rating, with a stable outlook and noting strong liquidity.

The credit agency cited the company's favourable geographic portfolio diversification, which offered multiple streams of free cash flow generation. Furthermore, it cited the conservative financial policies in place and the proactive measures taken to manage Covid-19 impacts. 

Funds for the repayment of the $700-million on its matured ten-year bond issued in April 2010 had been drawn from the $1.4-billion revolving credit facility.

In a strong cash position after the bond repayment, the company was procuring additional credit facilities to further bolster available liquidity and would provide an update on this on May 11.