AnlgoGold Ashanti to make further cut in $3.1bn debt
JOHANNESBURG (miningweekly.com) – As part of its $3.1-billion debt reduction strategy and to lower interest payments, gold miner AngloGold Ashanti is offering to buy back up to $810-million in the aggregate principal amount of its outstanding 8.5% high-yield bonds, maturing in 2020.
The company would use cash on hand, following the $820-million cash sale of the Cripple Creek & Victor (CC&V) mine, in Colorado, in the US, to NYSE-listed Newmont Mining Corporation earlier this month, and borrowings under existing credit facilities, if needed, to buy back the bonds.
“This is another decisive step forward in our strategy of cutting debt and reducing our interest bill to improve free cash flow.
“Our aim remains to sustainably improve cash flow through operational improvements and lowering interest costs, while maintaining sufficient liquidity,” CFO Christine Ramon said.
AngloGold Ashanti has responded to lower gold prices by cutting overhead expenditure by more than two-thirds since the end of 2012, while lowering all-in sustaining costs by about one-quarter over the same period.
In addition, the group introduced two new, low-cost mines, closed higher-cost assets, removed unprofitable ounces from its portfolio and sold CC&V to reduce net debt. It was now intensifying efficiency efforts to complement cost benefits from weakening local currencies and falling oil prices.
Assuming the offer was fully taken up, AngloGold Ashanti’s yearly cash interest expense would decrease by about $69-million, to $170-million. The company would continue to have significant sources of liquidity, including undrawn headroom in its various revolving credit facilities, of about $1.1-billion, and cash of $400-million.
These would be used to weather gold price volatility and unforeseen interruptions in production if required.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation