AngloGold Ashanti leads Tier I stocks

AngloGold Ashanti has assumed leadership of Tier I gold stocks.

The company’s share price began to rise in the summer, on the news that the company’s chief executive officer, Bobby Godsell, was leaving the company, to be replaced by Mark Cutifani.

Mr Godsell’s departure in September was followed by a review that resulted in the resignation of Neville Nicolau, the company’s chief operating officer, in November.

AngloGold Ashanti’s performance is impressive, given the uncertainties hanging over deep level mining in South Africa.

The group is, however, in a better position than Gold Fields and Harmony, the other South African-based Tier I companies.

In 2006, Anglo Ashanti produced 5.6 million ounces of gold, of which 45% was mined from deep-level hard-rock operations in South Africa.

A further 45% came from shallow and surface operations in the country and 0.5 million ounces (or 10%) came from the company’s underground operations around the world.

AngloGold Ashanti currently has 21 sites across 10 countries on four continents and its project pipeline and global exploration program is increasingly attracting investor interest.

Exploration expenditure is expected to increase to $163m this year, with work being carried out on a number of brownfield exploration projects and on three key greenfields areas: the Tropicana joint venture in Western Australia, in Colombia, and in the Democratic Republic of the Congo.

Projects are also underway in Russia, China, the Philippines and Laos.

AngloGold Ashanti owns and operates some of South Africa’s best gold mines and in terms of unmined gold, retains one of the world’s leading positions.

Reserves are estimated at 67 million ounces and resources at more than 181 million ounces.

In the third quarter of 2007, the company recorded a 6% increase in gold output, to 1.43 million ounces. Adjusted earnings for the period were similar to the previous quarter, at $81 million.