Cripple Creek and Victor Gold Mine proceeds with expansion plans

February 24, 2015

In September, Anglo Gold Ashanti announced a cost-cutting and restructuring plan that included reducing operations at its mine in Ghana and seeking partners for the mine in Ghana, another in Columbia and one of its operating assets.

The Colorado Springs Gazette reported on Feb. 23 that the operating asset might be the Cripple Creek & Victor Gold Mine in Colorado.

Anglo Gold Ashanti lost $79 million last year and wants to cut its $3.1 billion in debt by $1 billion to cope with gold prices that have declined more than 25 percent in the past two years.

South African mining giant AngloGold Ashanti Ltd. may be looking to find a partner or sell Colorado's largest gold mine, located near Cripple Creek, as part of a restructuring aimed at reducing debt amid falling gold prices, a company official said.

AngloGold is “shopping everything, and we would be included in that,” Jane Mannon, community affairs manager for Cripple Creek & Victor Gold Mining Co. told The Gazette. “Right now, we are on hold as far as knowing where we are in the process, but otherwise it is business as usual.”

That means a $585 million expansion to add a leach field, recovery center and mining facility continues and is on schedule to be completed in mid-2016, Mannon said. The expansion is expected to boost the mine’s output from 231,000 ounces of gold last year to 350,000 ounces this year, and add 50 employees to its 550-person work force.

The company has spent $342 million so far on the expansion and plans to spend another $100 million this year.

The mine is in the early stages of drilling to identify deposits that could trigger underground mining in the Cripple Creek area by 2017 for the first time in more than two decades.

The Cripple Creek mine is profitable: It earned $127 million last year on $325 million in revenue, according to financial results posted on AngloGold’s website.

A joint venture or sale of a key asset “is being looked at,” AngloGold CEO Srinivasan Venkatakrishnan said during a conference call. But it's not a given.

“What we are not going to be doing is a fire sale of assets. The shop is closed for bargain hunters. If we don’t get full value, we won’t sell.”



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