Anglogold to miss production target

Accra, Aug. 2, GNA - Production issues at Anglogold's Geita open-pit mine in Tanzania have forced AngloGold Ashanti, the world's third largest gold producer, to reduce its earlier annual forecast production target to 5.8 million ounces from 6.0 million ounces. Cash costs, according to a quarterly of the Company, are also higher than originally planned.

The mine in December 2005 forecast a cost of between 285 dollars an ounce and 293 dollars an ounce but has since revised it to 301 dollars an ounce with third quarter costs expected at 306 dollars an ounce. "In light of the Company's year-to-date performance and the downward revision of the annual forecast ounces for Geita and Cripple Creek and Victor, the group production outlook for the year currently stands at around 5.7 million ounces,=94 said the Company in its second quarter results announcement. "We are looking at settling at around 6.0 million ounces to 6.5 million ounces, that has always been our target,=94 Srinivasan Venkatakrishnan (Venkat), AngloGold's Finance Director, said. This level seems sustainable for a number of years, according to Venkat. 93Of our 21 operations, 16 have lives of 10 years and longer."

Geita, expected to contribute more than 562,000 ounces originally, would only manage 350,000 ounces, according to results presentation. The pushback of the open pit wall was delayed, while the expected grade is lower, it said. Next year, however, the mine is expected to produce 650,000 ounces, as the cutback would have been completed and higher grades are accessed.

Higher-grade zones would also be mined at the Sunrise Dam operation in Australia, which would boost production by between 70,000 ounces and 100,000 ounces. A plant expansion of Anglogold's pits in Brazil would also boost production by 50,000 ounces to 70,000 ounces.