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The new head of AngloGold cancels merger talks

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AngloGold Ashanti’s next chief executive, named on Tuesday as Alberto Calderon, canceled the discussion of a merger between the word’s third largest gold miner and his South African counterparts, saying the company can provide great returns for shareholders simply “making the basics right.”

Calderon, an industry veteran, told the Financial Times he was not surprised that smaller rivals wanted to “get their hands on AngloGold” but said the $ 8 billion company was already big enough.

“When you have 3m ounces [of annual production] you have enough scale and so becoming larger than 3 m ounces will not give you synergy per se, “he said.” In a relatively short space of time, years not months, this company could add a lot of value. “

AngloGold was one of the worst gold companies in the world in the past year when the search for a new leader dragged on and the company was forced to suspend operations at a key mine in Ghana.

Speculation of the acquisition has revolved around the listed company in Johannesburg since Sibanye-Stillwater chief Neal Froneman said in March that it should merge with AngloGold and Golden Fields to create a South African precious metal champion.

“No one from Anglo has talked about this,” Calderon said. “It’s the other younger players who are dying to get their hands on a company like AngloGold. I hope that in my conversations with stockholders they can see the rise we have like we have today… And I think they know it. that there is enormous potential just by doing the basics right. ”

Calderon, a 61-year-old Colombian who ran for first place in BHP before the position went to Sir Andrew Mackenzie, take the helm by AngloGold in September.

The company has been without a leader since the sudden departure in September of the former Barrick executive Kelvin Dushnisky after two years in the role.

Shares in AngloGold have risen 5 percent on the news of Calderon’s appointment Tuesday, but are still up 45 percent in the last 12 months.

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Tyler Broda, an analyst at RBC Capital Markets, said the announcement is positive since it helped remove the “uncertainty over leadership” that had weighed on AngloGold’s share price.

AngloGold, which was born out of a mining empire created by Ernest Oppenheimer, sold it remaining South African mining last year to focus on more profitable operations elsewhere in Africa, Australia and the Americas.

This prompted talk that the company should move its listing to London, a move that could also help lead to a revaluation of its shares. AngloGold trades with a 50 percent discount to industry leaders Newmont Corporation and Barrick Gold.

Describing London’s discussed list as “elephant in the room,” Calderon said it was something that should be treated but it was not an immediate concern. “It’s part of a series of options to really reduce that discount,” he said.

Calderon, who resigned as head of Australian explosives maker Orica in March, said his initial focus would be to rebuild credibility with investors.

He said AngloGold needed to convince the market that it could convert gold resources into reserves and run on projects such as extending the life of the Mina Geita in Tanzania and developed a copper-gold site in Columbia.

“I looked at the challenges of the company and I thought, to be honest, they were on my way,” Calderon added. “So, I want to say that it’s about organic growth, it’s about implementing projects and improving credibility with stakeholders. It’s also a bit of simplifying the operating model. That’s what I’ve been doing for 20 years.”


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