4 October 2006

Ghana: Obuasi to Lose 10,000 Ounces Gold This Year

ANGLOGOLD Ashanti CEO, Bobby Godsell, has said the Obuasi mine could lose 10,000 ounces of gold this year due to the power crisis in the country. He described this situation as "disappointing".

Ghana has been hit by power rationing due to the low level of water to propel the turbines in the Akosombo dam.

Responding to questions after his presentation to the Denver Gold Forum, Godsell also said Obuasi would lose an additional 10,000oz of production owing to power shortages in Ghana.

In monetary value, the 10,000oz was equivalent to $5.9 million in yesterday's trading in New York at $591 per ounce.

AngloGold acquired the deep level mine when it merged with Ashanti and viewed it as a major asset, which the group could bring to account through major capital investment and its technical expertise.

Following a string of initial problems at Obuasi, Godsell subsequently told a quarterly press conference in Johannesburg that AngloGold Ashanti management was staking its technical reputation on, turning the mine around.

He told the Denver conference that Obuasi would in future produce at a level of 400,000 oz/year and management's challenge was to maximize value from the operation at that level.

Obuasi would lose some 10,000oz of production in the current financial year because of the current power shortage situation in Ghana, he said.

The 2005 AngloGold Ashanti annual report said the original target at Obuasi was to raise sustainable production to a level of 500,000 oz/year but that this level was unlikely to be reached.

The 2005 annual report also estimated Obuasi's production for 2006 at between 407,000 oz and 423,000oz.

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