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AngloGold or Gold Fields: which will eligible CEOs prefer? -

Thursday, 17 September 2020

WHICH is the better company to work for: AngloGold Ashanti or Gold Fields? That could be a question eligible chief executive officers might be asking themselves right now given both companies are seeking to appoint one.

One might also argue, it's also a bit of a "sellers market" for CEOs operating out of South African headquarters. Covid-19 travel restrictions may limit the pool of available applicants. Rio Tinto is also seeking a new CEO, providing internationally-experienced executives yet more choice.

The market reckons Gold Fields is, if not a better run company, then one with better prospects and less risk than AngloGold. Its share has massively outperformed AngloGold  over the past 12 months. South Deep, the thorn in Gold Fields CEO, Nick Holland's side, is now actually booking proper cash flow. The Salares Norte project in Chile looks sheer quality, whilst Ghana and Australian assets are in relatively benign jurisdictions.

Compare that to AngloGold's exposure to Tanzania and the evergreen question as to whether it'll ever free a growing cash pile from the Democratic Republic of Congo, where it shares the cash-spinning Kibali mine with Barrick Gold. There's also the question of finally turning to account the Colombia exploration assets, one of which is managed by partner, B2Gold, and the other it owns outright.

The answer of choosing which job application form to fill out is a matter of perspective, obviously. Holland will hand the keys of a company at the top of its game. A new executive would be asked to keep the beat immediately, not rock the boat, although fresh blood might be called upon to make a decision about whether to finally sell South Deep provided Holland doesn't make that his swansong.

It could be argued that an ambitious, get-ahead kind of leader at Gold Fields might even favour the takeover of AngloGold – a chestnut of an idea that never ceases to fascinate mining journalists in South Africa (this one included). In any event, given Gold Fields' re-rating, any misstep following Holland's meticulously plotted route map would likely cause a correction.

In AngloGold, however, there's a pathway to success coded into its challenges. The restructuring is complete, but the former AngloGold CEO, Kelvin Dushnisky, left behind what feels more like a work-in-progress than Gold Fields. Solving any one of a handful of challenges the company faces – stubbornly low cash conversion, VAT lock-ups and bringing Colombia to account – has every chance of catalysing a rerating.

Chris Griffith, the former CEO of Anglo American Platinum, must be a favourite for either job. Does Duncan Wanblad at Anglo American feel he's the anointed at Anglo American, or does he prefer a move back home? (He's head of strategy and business development at Anglo … He must be the favourite to replace Cutifani).

Both companies might also much prefer an internal appointment, especially AngloGold. Dushnisky was only two years into the job so a local hand does have a home comforts element to the Johannesburg firm investors may prefer.

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