JSE- and NYSE-listed AngloGold Ashanti has announced that all conditions precedent to the sale of its remaining mines in South Africa to Harmony Gold have been met.
This includes the unconditional approval by the Department of Mineral Resources and Energy for the transfer of the West Wits mineral rights, comprising the Mponeng, Savuka and TauTona mines, to Harmony.
The $300-million deal is scheduled to close on September 30, following which Harmony will take effective control of the Mponeng mine, Mine Waste Solutions (MWS) and all other assets and liabilities that form part of the transaction.
Harmony will pay $200-million in cash, and a further $260/oz in compensation for underground gold production from the Mponeng, Savuka and TauTona mines, in Gauteng, that exceeds 250 000 oz/y, for six years starting from January 1 next year. This is valued at about $100-million, based on the mines’ current production forecast.
These mines are among the deepest operating mines in the world, with all three extending to a depth of nearly 4 000 m underground.
Harmony will pay a further contingent compensation of $20/oz to AngloGold, should the West Wits mineral rights – around the existing mines – be developed below the current infrastructure.
AngloGold is focused on narrowing its focus to grow 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.
“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,” says AngloGold interim CEO Christine Ramon.
AngloGold is also selling its assets in Mali, toward a streamlined, high-margin business.
For Harmony, the transaction will improve its portfolio mix between surface and underground operations, as well as improve the group’s overall recovered grade and cash flow margins.
“This is a proud moment for Harmony, further demonstrating our well-established belief in and commitment to the sustainability of gold, our confidence in South Africa and our determination to grow value for all of our stakeholders,” says Harmony CEO Peter Steenkamp.