AngloGold Ashanti (NYSE:AU) and Gold Fields (NYSE:GFI) are looking to dig even deeper in their quest for gold in South Africa, with AngloGold looking to go 1,000 meters lower than the 4,000 meters they're down already for its Mponeng mine.
There have been few major, new gold discoveries recently, and other their acquiring other gold miners, which would sell at a premium because of scarcity and valuations, the other option is to expand organically, and in South Africe that means deeper and wider.
AngloGold CEO Mark Cutifani says, "The most critical challenges for all of us in South Africa are depths and depletion of reserves."
To that end, he said he has no reason not to dig another 1,000 meters down at Mponeng to extract more gold.
Cutifani said if the digging at Mponeng ends up being successful, it could add up to 3 decades of mining life to the mine, and at competitive costs. It will take a minimum of fiver years to complete the digging.
"There's another 100 million ounces in our areas, and our thinking now is how do we get it. It's too big a prize to walk away from. Even if the gold price were lower, we would still do it," Cutifani asserted.
According to Gold Fields CEO Nicholas Holland, the company has an estmated 25 million ounces of gold close to where they're at now, and drilling a little deeper will given them access to it. One of those is the Driefontein mine, which they may only have to go down another 300 meters below the 3,500 meters down the company is working at now.
Holland said, "We can maintain production at existing mines for at least the next five to 10 years."
Gold Fields closed Wednesday at $16.58, gaining $0.42, or 2.60 percent. AngloGold closed at $46.26, rising $0.35, or 0.76 percent.
Showing posts with label Nick Holland. Show all posts
Showing posts with label Nick Holland. Show all posts
Thursday, February 17, 2011
Thursday, August 5, 2010
Gold Fields' (NYSE:GFI) Nick Holland Says Company Not Relying On Gold Price
The CEO of Gold Fields (NYSE:GFI), Nick Holland, said in an interview that the company isn't going to rely on gold prices to "bail us out." Holland added that the company is actually going to budget a lower price than the spot price is today.
This isn't to say he believes gold prices are going to fall, but that the company needs to focus on streamlining their operations, and that's going to be the focus over the next year, said Holland.
Holland added the gold price will move where it moves, and that's outside the control of the company, he wants to focus on what the company can control, and he's going to do that by putting all aspects of the business processes under review.
The goal is to improve the profitability of the cash flow for each ounce of gold that comes out of the ground.
Holland's goal is to widen margins, which this year were 15 percent. He wants to bring that to 20 percent no matter what price gold ends up at.
I think this is what gold mining companies around the world should be doing, as some miners had much larger revenues but dropped the ball on costs and margins, which lowered earnings.
This isn't to say he believes gold prices are going to fall, but that the company needs to focus on streamlining their operations, and that's going to be the focus over the next year, said Holland.
Holland added the gold price will move where it moves, and that's outside the control of the company, he wants to focus on what the company can control, and he's going to do that by putting all aspects of the business processes under review.
The goal is to improve the profitability of the cash flow for each ounce of gold that comes out of the ground.
Holland's goal is to widen margins, which this year were 15 percent. He wants to bring that to 20 percent no matter what price gold ends up at.
I think this is what gold mining companies around the world should be doing, as some miners had much larger revenues but dropped the ball on costs and margins, which lowered earnings.
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