April 30 (Bloomberg) -- AngloGold Ashanti Ltd., the world’s third-largest producer of the metal, has a shortlist of bidders for its Navachab mine in northwestern Namibia after “good interest” in the asset.
“From the initial group we’ve selected a shortlist of parties that will proceed to the next phase of the process, after which these shortlisted bidders will be required to submit a binding offer,” Stewart Bailey, a New York-based spokesman, said in an e-mailed response to questions yesterday.
AngloGold planned to review whether Navachab should be sold, Mark Cutifani, the company’s then chief executive officer, said on Aug. 6. AngloGold’s stock has dropped 35 percent this year in Johannesburg after the bullion price slumped to the lowest in more than two years.
AngloGold’s Navachab gold mine is situated close to Karibib, about 170 kilometers (106 miles) northwest of the capital, Windhoek. The open-pit mine, which began operations in 1989, has a processing plant that handles 120,000 metric tons a month, according to the company’s annual report. The mine produced 74,000 ounces of gold last year and cash costs were $929 per ounce.
The company is reviewing costs and expansion projects and plans to offload peripheral assets, Chief Financial Officer Srinivasan Venkatakrishnan, who is acting as joint CEO until a replacement for Cutifani is found, said on Feb. 20.
“This optimization makes good sense for AngloGold, and for global gold mining companies, especially in an environment where inflationary pressures outweigh the rise in gold price,” David Davis, a mining analyst at SBG Securities Ltd. in Johannesburg, said in an e-mail. “The potential sale of Navachab falls within this new strategy.”
Gold declined 0.6 percent to $1,467.55 an ounce by 4:11 p.m. in London. AngloGold fell for a third day, dropping 1.5 percent to 167.40 rand by the close in Johannesburg.
“Interest is strong in what remains a good asset in an attractive jurisdiction,” Bailey said.
AngloGold is being advised on the sale by CIBC World Markets.
“I would expect AngloGold to look at the potential sale of their mines in Mali, which are coming to the end of their mine life and will likely require a significant injection of capital,” Davis said.
To contact the reporter on this story: Paul Burkhardt in Johannesburg at email@example.com