AngloGold Ashanti (AU - Free Report) announced that its Tropicana Gold Mine in Western Australia has produced its first gold ahead of schedule and within budget. The company announced that the new gold ounces delivered were below its current average cost structure.
The Tropicana mine is a joint venture between AngloGold Ashanti and Independence Group. AngloGold owns and operates 70% of the mine with Independence Group holding the remaining stake. Production at the mine was initially scheduled to start in the fourth quarter of this year.
With the discovery, development and the production at the mine, AngloGold has achieved a significant milestone and remains focused on providing employment as well as opportunities for local businesses, with contracts worth over A$30 million ($28 million) a year awarded to Aboriginal businesses. The company is also focused on finding additional mineralization close to the plant, while testing the promising targets in its joint venture tenement.
Despite moving ahead of schedule, the estimated capital expenditure for the project is unchanged at between A$820 million ($767 million) and A$845 million ($791 million). AngloGold is aiming to achieve a production rate of between 470,000 to 490,000 ounces in the first three years. Cash costs for Tropicana are estimated to be between A$590 ($552) and A$630 ($590) per ounce.
Recently, AngloGold’s Kibali Gold Mine, a joint venture with Randgold Resources (GOLD - Free Report) , also produced its first gold ahead of schedule and within budget. Both Kibali and Tropicana mines are expected to produce 600,000 ounces of gold from next year. AngloGold will focus on realizing about $460 million in combined savings from corporate overheads and exploration activities in 2014, compared with 2012.
AngloGold currently retains a Zacks Rank #3 (Hold).
Other companies in the mining industry with a favourable Zacks Rank are Gold Fields Ltd. (GFI - Free Report) and Lake Shore Gold Corp. . Both carry a Zacks Rank #2 (Buy).