Mponeng Gold Mine, which the equity raise will part fund.
A requisite majority of the shareholders of Harmony Gold gave their approval this month to the gold mining company raising equity capital of $200-million to part-fund the company’s acquisition of AngloGold Ashanti’s South African business.
The requisite shareholder approval was given at a virtual extraordinary general meeting (EGM) of the Johannesburg- and New York-listed company, conducted entirely through electronic communication in view of the Covid-19 pandemic and related restrictions issued under the Disaster Management Act.
The company may now raise up to $200-million in equity capital to fund the first tranche payment of its acquisition of the Mponeng gold mine, Mine Waste Solutions (MWS), AngloGold’s mine waste retreatment operation and a surface rock dump processing business.
Harmony stated in a media release to Engineering News & Mining Weekly that it would access the market at its discretion.
“Further announcements regarding the potential equity capital raising will be made at the appropriate time,” it stated, adding that there had been 542 725 460 ordinary shares in issue at the time of the EGM.
The Competition Tribunal has unconditionally approved the transaction, the purchase price for which includes $200-million in cash, as well as a deferred payment of up to $100-million. Collectively, the assets add more than 350 000 oz/y to Harmony’s portfolio.
The deferred payment, Engineering News & Mining Weekly has reported, would include $260/oz payable on all underground production sourced within the West Wits mineral rights, comprising the Mponeng, Savuka and TauTona mines, in excess of 250000 oz/y for six years from January 1, 2021.
A further deferred payment of $20/oz is payable for underground production from the West Wits mineral rights below the current infrastructure, if developed.
Besides Mponeng mine and its associated assets and liabilities, the transaction takes in the TauTona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities; First Uranium, which owns MWS and Chemwes, as well as associated tailings assets and liabilities; Covalent Water Company, AngloGold Security Services and Masakhisane Investments; and certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal river region and their associated assets and liabilities.
AngloGold has stated that it would retain its interest in Rand Refinery, as well as its obligations relating to the postretirement medical cost for its applicable retired and remaining employees and its obligations under the Silicosis Class Action Settlement Agreement.
Harmony primarily produces gold. Silver and uranium, the Competition Tribunal stated, were by-products of its gold production. Of relevance to this transaction, the tribunal stated, were Harmony Gold’s wholly owned subsidiaries, Harmony Moab and Golden Core.
Of relevance to this transaction, the tribunal added, were AngloGold’s wholly owned firms and assets grouped into two ‘packages’, the West Wits packagecomprising shares in and claims against three Gauteng mines, Water Company, AGA Security Services and Masakhisane Investment, all proprietary companies. The Vaal Reef package, it said, comprised shares in and claims against First Uranium, Chemwes and assets not bought in Harmony Moab’s 2018 acquisition of AngloGold’s Vaal River mining business,comprising buildings, Kopanang Gold Plant and equipment.
The upcoming acquisition of AngloGold’s South African business follows Harmony’s purchase of Moab Khotsong from AngloGold in 2018.
Harmony itself has 13 gold operations in South Africa and three in Papua New Guinea.