JOHANNESBURG (miningweekly.com) - South Africa-based gold major AngloGold Ashanti was looking to growing its production base by one-million ounces organically from five million ounces a year to six-million ounces a year, CEO Mark Cutifani said on Monday.

Delivering on each of its 2008 commitments, Cutifani said that such growth was possible with the assets that the company already had in Africa, Australia, Brazil and North America.

At the same time, he said, the company was striving to make a "real dent" in its cash operating costs so that it could continually to improve its margins.

"As we reduce the hedge book, it should get better for shareholders, so we have to strike that balance between generating cash today and investing in the future, and I think we have the balance right.

"Shareholders will see cash today and growth tomorrow, and from both perspectives I think we are a good bet," Cutifani in an exclusive interview with Mining Weekly Online.

The Australian made a point of emphasising that the company was "very pleased" with the results that had been achieved in South Africa, in particular.

"Against the electricity crisis 12 months ago, to be where the South African operations are today is quite remarkable," he said.

"We have the deepest mine in the world, one of the most competitive cost structures in the world, and obviously grade helps that, but when you are mining at almost 4 000 m, the team has done a remarkable job," Cutifani said.

AngloGold Ashanti's Mponeng gold mine on the Far West Rand had, he said, gone beyond the depth of 3 777 m, the past world-record depth, and was still managing to produce gold at $222/oz, better than some surface mines.

On mines outside South Africa, notably at Geita in Tanzania, needing attention, Cutifani said that of the five former problem assets, four had come together and were improving.

"We are very pleased with the progress that we are making on 80% of those turnaround assets and we still have one recalcitrant that needs a bit more work, and we're all pitching in to support the team to turn that around.

"Geita's day will come this year and we will get there. It might take us a few more months, but we will get there, and certainly we are going to throw the full resources of the organisation behind the team," he said.

"As we reduce the hedge book, it should get better for shareholders, so we have to strike that balance between generating cash today and investing in the future, and I think we have the balance right.

"Shareholders will see cash today and growth tomorrow and from both perspectives I think we're a good bet," said Cutifani, who expected the gold price to pop through the $1 000/oz level at some stage, as gold's hard-currency status intensified.

By the end of the year net debt would be down to $300-million.

Credit Suisse Standard Securities mining investment analyst David Davis said that AngloGold Ashanti had not only, under its new leadership, halved its hedge book commitments, but it had also delivered on operational turnaround, cost containment, safety and financing. Davis said that net debt had been lowered and going forward the company would continue to build cash flow.

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