| Wed 18 Feb 2009, 7:37 | | ANG - Anglogold Ashanti To Sell The Tau Lekoa Mine As Well As The Adjacent |
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ANG
ANANO
ANG - Anglogold Ashanti To Sell The Tau Lekoa Mine, As Well As The Adjacent
Goedgenoeg And Weltevreden Project Areas To Simmer And Jack Mines Limited
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number:ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
ANGLOGOLD ASHANTI TO SELL THE TAU LEKOA MINE, AS WELL AS THE ADJACENT GOEDGENOEG
AND WELTEVREDEN PROJECT AREAS TO SIMMER AND JACK MINES LIMITED
AngloGold Ashanti Limited ("AngloGold Ashanti" or "the Company") is pleased
to announce that it has agreed to sell with effect from 1 January 2010 (or
after), the Tau Lekoa mine together with the adjacent Weltevreden and Goedgenoeg
project areas (the "Transaction") to Simmer and Jack Mines Limited ("Simmers")
for an aggregate consideration of:
(a) R600 million less an offset up to a maximum of R150 million for unhedged
free cash flow generated by the Tau Lekoa mine in the period between 1 January
2009 and 31 December 2009 as well as an offset for unhedged free cashflow
generated by the Tau Lekoa mine in the period between 1 January 2010 and the
Effective Date of the Transaction (the "Completion Consideration"). Simmers
shall endeavor to settle the Completion Consideration entirely in cash, however
Simmers may issue to AngloGold Ashanti ordinary shares in Simmers ("Shares") up
to a maximum value of R150 million (the "Share Value") with the remainder
payable in cash; and
(b) royalty ("Royalty"), determined at 3% of the net revenue (being gross
revenue less state royalties) generated by the Tau Lekoa mine and any operations
as developed at Weltevreden and Goedgenoeg (the "Sale Assets"). The Royalty will
be payable quarterly for each quarter commencing from 1 January 2010 until the
total production from the Sale Assets upon which the Royalty is paid is equal to
1.5 million ounces and provided that the average quarterly rand price of gold is
equal to or exceeds R180,000/kg (in 1 January 2010 terms)
The Effective Date will occur on the later of 1 January 2010 or the first day
in the calendar month following the fulfillment of all conditions precedent to
the Transaction. AngloGold Ashanti will continue to operate Tau Lekoa until the
Effective Date with appropriate joint management arrangements with Simmers and
will retain all operating cash flow generated from the Tau Lekoa mine for the
year ending 31 December 2009 greater than R150 million as determined on an
unhedged basis. In addition, following the Effective Date, Simmers will treat
all ores produced from the Sales Assets at its own processing facilities. As a
result AngloGold Ashanti will have increased processing capacity available,
allowing for the processing of additional material sooner from its other Vaal
River mines and surface sources, thereby further accelerating cash flow.
The Transaction is consistent with AngloGold Ashanti`s strategy of active
portfolio management to focus human and financial resources on core operations.
Tau Lekoa is one of the smallest of AngloGold Ashanti`s South African operations
and is both geographically and geologically separated from the Company`s other
Vaal River mines (the Ventersdorp Contact Reef as mined at Tau Lekoa is
generally of a lower gold grade and also does not contain uranium in meaningful
quantities as compared to the Vaal Reef as mined at the Company`s other Vaal
River mines). AngloGold Ashanti therefore took a strategic decision, following
its asset review process, to initiate a sale process for the Sale Assets subject
to satisfaction of the Company`s value parameters.
The Transaction is conditional upon the fulfillment of, amongst others, the
following conditions precedent:
(1) Simmers raising sufficient cash to settle the Completion Consideration
subject to the Share Value;
(2) the receipt of all Ministerial Consents and/or other Government agency
approvals in South Africa, as required to transfer all rights, title and
interests to the mining properties forming part of the Sale Assets;
(3) if and to the extent required, the approval of the Transaction by Simmers
shareholders; and
(4) certain regulatory and other third party approvals, if and to the extent
required, including the South African Reserve Bank, the JSE Limited and the
South African Competition Commission.
Commenting on the Transaction, Mark Cutifani, CEO of AngloGold Ashanti, said
"I am delighted that we have been able to execute another important step to
focus our asset portfolio. The Transaction will act to strengthen our balance
sheet further and after an orderly transition process will enable us to focus
our key human resources and financial resources across our strategic asset base
and growth initiatives."
ENDS
17 February 2009
JSE SPONSOR : UBS
Financial Advisers Rand Merchant Bank
Legal Advisers Tabacks
Queries
South Africa
Himesh Persotam (Investor Relations) Tel: +27(0)11637-6647
Mobile: +27(0)82 339 3890 E-mail:hpersotam@AngloGoldAshanti.com
Alan Fine (Media) Tel:+27(0)11 637-6383 Mobile:+27(0)83 250 0757
E-mail:afine@AngloGoldAshanti.com
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effects of the reduction, the economic outlook
for the gold mining industry, expectations regarding gold prices, production,
cash costs and other operating results, growth prospects and outlook of
AngloGold Ashanti`s operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of AngloGold
Ashanti`s exploration and production projects and completion of acquisitions and
dispositions, AngloGold Ashanti`s liquidity and capital resources, including its
intentions and ability to refinance its $1 billion convertible bond, and
expenditure and the outcome and consequences of any pending litigation
proceedings, contain certain forward-looking statements regarding AngloGold
Ashanti`s operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. For a discussion of such factors,
refer to AngloGold Ashanti`s annual report for the year ended 31 December 2007,
which was distributed to shareholders on 31 March 2008, and report to
shareholders for the quarter and nine months ended 30 September 2008, which was
distributed to shareholders on 30 October 2008. AngloGold Ashanti undertakes no
obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after today`s date or to reflect
the occurrence of unanticipated events. All subsequent written or oral forward-
looking statements attributable to AngloGold Ashanti or any person acting on its
behalf are qualified by the cautionary statements herein.
AngloGold Ashanti posts information that is important to investors on the
main page of its website at www.anglogoldashanti.com and under the "Investors"
tab on the main page. This information is updated regularly. Investors should
visit this website to obtain important information about AngloGold Ashanti.
Date: 18/02/2009 07:37:02 Produced by the JSE SENS Department.
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