Rangold Resources said on Monday it is pulling out of a joint venture with AngloGold Ashanti to redevelop AngloGold’s aging Obuasi Mine in Ghana, less than four months after the deal was announced.
Randgold said that after due diligence it has decided the proposed project does not meet its investment criteria.
Randgold in a statement said: “After undertaking a due diligence exercise into the mine and the redevelopment opportunity it affords, and following the work undertaken on the revised development plan, Randgold has determined the development plan will not satisfy Randgold’s internal investment requirements”.
Accordingly, Randgold has decided to terminate the investment agreement entered into with AngloGold Ashanti with immediate effect.
Chief Executive Mark Bristow said Randgold remains committed to creating real value for all its stakeholders, by continuing to invest substantially in its exploration programmes with their proven record of success as well as by investigating potential growth opportunities presented by the market.
Randgold said in September the joint venture would not spend more than US$1billion on redeveloping Obuasi, which holds about 5 million ounces of gold reserves but has not made a profit in a decade.
AngloGold stopped production at Obuasi in November and cut jobs.
The price of spot gold has fallen almost 20 percent from its 2014 peak to just above US$1,000 an ounce, forcing companies to sell mines, cut spending and shed jobs.