Photo by: Bloomberg
TORONTO (miningweekly.com) – LSE- and Nasdaq-listed Randgold Resources has decided to terminate the investment agreement entered into with AngloGold Ashanti in September, to revive the struggling Obuasi gold mine, in Ghana, with immediate effect.
Randgold had in September agreed to lead and fund a development plan designed to rebuild Obuasi as a viable long-life mining business, with an attractive cost structure and returns.
At the end of 2014, the Johannesburg- and New York-listed AngloGold converted Obuasi to limited operations, ceasing underground production, retrenching the workforce, but continuing to process tailings and starting a feasibility study on the redevelopment of the mine.
Randgold on Monday advised that after undertaking a due diligence exercise into the mine and the redevelopment opportunity the mine afforded, and following the work undertaken on the revised development plan, Randgold had determined that the development plan would not satisfy Randgold’s internal investment requirements.
Obuasi was expected to be remodelled to survive on a gold price of $1 000/oz, Randgold's longstanding internal investment yardstick, with the capital cost of Obuasi's revival targeted at under $1-billion.
Located in the Ashanti region of Ghana, 320 km north-west of the capital Accra, Obuasi was a high-grade deposit with reserves of 24.53-million tonnes at 6.7 g/t for 5.29-million ounces.
Randgold’s Nasdaq-listed stock on Monday gained nearly 1% to change hands at $60.08 apiece.