Tracking the Gold ElephantsSunday Times (Johannesburg)September...

Tracking the Gold Elephants

Sunday Times (Johannesburg)

September 19, 2004
Posted to the web September 20, 2004

Hilton Shone
Johannesburg

Problems aside, the DRC and Russia are prime pieces of mining real estate for AngloGold Ashanti

FINDING replacement ounces is arguably the biggest challenge for a major gold company like AngloGold Ashanti.
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But company president Sam Jonah, responsible for greenfields exploration and new business, believes the Democratic Republic of Congo (DRC) offers some of the best prospects for a company that produced 5.6 million ounces of the yellow metal in 2003 and expects a further 6.1 million this year.

"When you are a mega-miner you have to look hard for elephants [mining slang for huge mineral deposits]. It's quite a challenge to replace our ounces," he told Business Times.

For a company of AngloGold's size - 25 operations on five continents - an elephant is a deposit with a minimum resource base of five million onces, Jonah explains.

Fortunately, the group has the mineral rights to a concession known as Kilo-Moto in the northeast of the DRC, covering 9 679 square kilometres.

"It's the best piece of gold real estate in Africa. Congo is definitely elephant country," says Jonah. "We are very excited about it and expect to start drilling to confirm the resource base by the end of the year."

The concession came with Ashanti Goldfields, which merged with AngloGold in a $1.4-billion deal in April this year to create the world's second-biggest gold mining group.

But what of the well-publicised conflict in the Great Lakes region, including the latest violence in which more than 160 ethnic Tutsi refugees from the northeastern part of DRC were massacred?

Jonah's response is straightforward: "We have had the property for some years now and the tragedy is not being able to realise its tremendous potential. It's an amazing creation in terms of its resources. There is every notable mineral, copper, cobalt, diamonds and gold, you name it.

"What we find most encouraging is that the United Nations (UN) is determined to enforce peace in the region. UN-led troops are present there and we are working closely with them."

Jonah also pays tribute to the South African government and the African Union (AU) for their role in attempting to broker peace.

"President Thabo Mbeki is lending his considerable presence and influence in helping to sponsor a peace accord despite the latest signs of it unravelling. Judging by the UN attitude and the role of President Mbeki and the AU there is a clear desire to see everyone emerging as a winner."

Be that as it may, Africa can be a difficult place to do business. Only late last month did the government of Guinea lift a three-month embargo on the export of gold by AngloGold Ashanti's Siguiri mine.

Jonah shrugs when asked for the reasons behind the embargo, and recalls Bobby Godsell telling a media and analyst presentation that "Africa is not for sissies".

rest of the article here: http://allafrica.com/stories/200409201366.html

Love that last quote.