AngloGold Ashanti Receives Approval for Sale of South African Mines

All conditions have been met regarding the sale of AngloGold Ashanti’s remaining mines in South Africa to Harmony Gold Mining Co. Ltd. This includes approval by the Department of Mineral Resources and Energy (DMRE) for the transfer of the West Wits mineral rights from AngloGold Ashanti to Harmony. The transaction is expected to close on September 30, upon which Harmony will assume full ownership and operation of all assets and liabilities.

AngloGold Ashanti is well-positioned to safely deliver better returns as its focus narrows on growing free cash flow and shareholder dividends, while investing in its next generation of opportunities.

“While the decision to sell our South African assets was not an easy one, we are pleased that the assets are going to Harmony, a capable and responsible operator that will ensure their long-term sustainability,” AngloGold Ashanti Interim CEO Christine Ramon said. “We can now sharpen our focus to pursue high return projects at several of our key assets, deliver new ounces from the world-class Obuasi mine in Ghana, and advance studies in Colombia, a new frontier for our business.”

The transaction has expected proceeds of around $300 million, subject to subsequent performance, and with additional proceeds if the West Wits are developed below current infrastructure. Harmony will pay US$200 million in cash on completion of the transaction. Harmony has also agreed to pay a contingent compensation of US$260 per ounce (oz) on underground gold production from the Mponeng, Savuka and TauTona mines that exceeds 250,000 oz per year for a period of six years commencing on January 1, 2021. This is valued at approximately US$100 million based on AngloGold Ashanti’s current production forecast; and a contingent compensation of US$20 per oz in relation to underground production sourced within the West Wits mineral rights — comprising the Mponeng, Savuka and TauTona mines — below the current infrastructure if it is developed.

This, together with the company’s pending sales of the company’s assets in Mali, will result in a streamlined, high-margin business with quality assets and a robust pipeline for growth, the company said. Gross cash proceeds from the transaction will be applied to further debt reduction.

As featured in Womp 2020 Vol 10 -