AngloGold Ashanti has offloaded its 50% interest in the Gramalote project in Colombia to a joint-venture partner, after the feasibility study found the project did not meet its investment thresholds for development.
AngloGold will receive $60m (R1.14bn) from Canadian B2 Gold Corporation, which will assume full ownership of the project that carries an estimated 2.60-million ounces in mineral reserves.
Both parties tried and failed to sell the asset to a third party.
“This sale will help increase our focus on our operating assets and the projects we intend to develop,” CEO Alberto Calderon said in a statement on Monday.
“AngloGold Ashanti remains a committed, long-term investor in Colombia with our exciting Quebradona copper and gold project and we look forward to playing a key role in developing of a modern, responsible mining sector in the country.”
The world’s fifth biggest producer was initially meant to spend $500m on the project as part of its growth cycle before pulling the plug following the feasibility study that was concluded in the second half of 2022.
However, its Quebradona copper and gold project in Colombia remains on track for development.
AngloGold will receive a cash payment of $20m and the balance will be dependent on project construction and production milestones that the Gramalote project reaches.
Late in August, AngloGold placed Córrego do Sítio (CDS), its marginal mine in Brazil, under care and maintenance in a decision that forms part of a wider shake-up of its global portfolio.
The decision was part of a strategy adopted by the gold producer 16 months ago to review and optimise its sprawling portfolio spanning Africa, the Americas and Australia.
Calderon is looking to improve productivity and reduce production costs as a way of catching up with global peers.
Shareholders recently also backed the company’s plan to move its primary listing from JSE to New York where the company looks to attract deeper capital markets.
The search for deeper markets was first alluded to in the group's annual report in March, where it laid out its ambition of closing the valuation gap between it and its peers, mainly gold-mining houses in Canada, Australia and the US.
Its share price, which is mostly driven by the gold price, was nearly 1% weaker at R337.34 in early afternoon trade on the JSE.
The phenomenal run that that catapulted AngloGold to R549 has since reversed in line with the moderation in gold prices, which are driven by the dollar and movements of US interest rates, among other factors.
Central banks have also slowed down their purchases of gold after record purchases during the first quarter.
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