Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Gold major AngloGold Ashanti is selling its Navachab gold mine, in Namibia, to little-known private company QKR Corporation for $110-million.
Navachab, QKR's first acquisition, is seen by the company’s president and former Johannesburg gold analyst Lloyd Pengilly as having significant potential.
It is another example of private equity showing a new interest in mining.
Navachab produces below 2% of AngloGold Ashanti’s total production and is being disposed of against the background of AngloGold wanting to concentrate its efforts on operations larger than Navachab.
The partly cash payment will be adjusted to take into account the AngloGold subsidiary’s net debt and working capital position on the transaction’s closing date.
In addition, AngloGold will receive deferred consideration in the form of a net smelter return, which will be paid quarterly for a period of seven years following the second anniversary of the closing date.
The net smelter return, reportedly a form of royalty payment, will be determined at 2% of ounces sold by Navachab during a relevant quarter, subject to an average gold price of $1 350/oz being achieved, and capped at 18 750 oz sold a quarter.
AngloGold Ashanti’s VP Charles Carter, who sees QKR as “the right group to take Navachab forward”, described the sale as being “for fair value in the midst of a difficult market”.
QKR said it would be working closely with Navachab management, the Namibian government and Namibia’s State-owned mining enterprise, Epangelo, to steer the mine through what it described as "its next phase of growth".
AngloGold Ashanti will continue to operate Navachab until the transaction is fully consummated.
Navachab has been owned and operated by AngloGold since the company was formed in 1998 and produced 46 000 oz of gold at a cash cost of $755/oz in the nine months to September 31 last year.
Pengilly left JP Morgan in August last year to set up QKR, the major shareholders of which are Qatar Holdings and Kulczyk Investments.
QKR describes itself as a private mining company that is focused on acquiring and building a diversified portfolio of developments and growth assets in the Europe, Middle East and Africa region and the Americas.