AngloGold Ashanti (AU) announced that its Kibali Gold Mine, a joint venture with Randgold Resources (GOLD), has produced its first gold ahead of schedule and within budget. AngloGold and Rangold hold a 45% stake each in the mine and the remaining 10% stake is owned by Sokimo, a state-owned company.
Kibali, which is located in the Democratic Republic of Congo, is a world-class gold mining asset, according to AngloGold. The mine is expected to produce around 600,000 ounces (oz) of gold from reserves of 11 million ounces (Moz) and resources of 21 Moz.
The Kibali mine is being developed in two stages, initially as an open pit operation and then an underground mine which is scheduled to access ore in 2015. AngloGold expects that gold sales will start from the next month and is now focusing on commissioning the rest of the metallurgical plant and the hydropower stations as well as progressing with the underground development. In 2014, the mine is expected to provide employment to more than 2,500 people which will mainly include Congolese nationals.
AngloGold is aiming to reduce costs, optimize free cash flow generation and enhance/maintain its margins and returns. The company is also focusing on efficiency gains. AngloGold is working towards realizing savings as well as sustaining capital expenditure over the next several months. The company plans to curtail those operations that do not yield higher returns.
AngloGold currently retains a Zacks Rank #3 (Hold).