AngloGold loses Venkat to Vedanta

AngloGold Ashanti (JSE:ANG) CEO Srinivasan Venkatakrishnan has resigned after accepting an offer to become CEO of Vedanta Resources (LSE:VED).

Staff reporter

Srinivasan Venkatakrishnan will move from AngloGold to Vedanta at the end of August

He has spent 18 years at the company, first as CFO and then as CEO in the past five years, and will leave at the end of August.

Prior to his stint at AngloGold, Venkat was CFO of Ashanti Goldfields. 

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At Vedanta, he will succeed the interim CEO Kuldip Kaura, who took over when previous CEO Tom Albanese stepped down at the end of August last year.

AngloGold noted under Venkat's leadership it had lowered all-in sustaining costs by 16%, all-in costs by 30%, overhead expenditure by two-thirds, and debt by one-third. During this time, the company also completed two new mining projects and met or beat annual guidance volumes each consecutive year over the five-year period.

AngloGold's productivity also rose 26% from 2012 to 9.66 ounces per total employee costed in 2017.

Chairman Sipho Pityana thanked Venkat for his years at the company, saying he had "embedded a culture of consistency and accountability in the business, and has created the ability for the company to thrive in a range of market conditions".

"He leaves behind a very strong foundation for us to take the company forward. We wish him the very best in his new endeavour," he said.

Venkat said AngloGold had "achieved a great deal by fostering a culture of respect, discipline and accountability throughout the organisation, in our effort to define a sustainable, long-term model for the gold industry".

"The company has an excellent portfolio of assets, exciting new opportunities and a strong, deep bench of talent that will take it forward under its new leadership," he said.

The company has kicked off a global search for a new CEO, with a sub-committee of the board formed to evaluate external and internal candidates. It hopes to find one before Venkat's August 30 departure date.

RBC's Tyler Broda said Venkat's move meant AngloGold would undergo a leadership transition allowing it to review its strategy and management capability.

"We would expect investors to be somewhat disappointed by this news, although with 18 years of service it is understandable why Venkat would want to move onto a new challenge. In the meantime, the company will need to navigate issues in Tanzania and the DRC", he said.

Broda said AngloGold's price to spot net asset value of 0.78x meant it was trading at a compelling multiple, which should provide some support for shares through the transitory period.

RBC kept AngloGold's rating at "outperform" and the target price at R13,200 (US$1,095.36) per share.

AngloGold's shares were trading at R11,160/share Monday, down 1.54% from the previous close.