| Mon 2 Nov 2009, 9:00 | | Anglogold Ashanti Limited And Randgold Resources Jointly Acquire A Further 20% |
|
ANG
ANANO
Anglogold Ashanti Limited And Randgold Resources Jointly Acquire A Further 20%
Of The Moto Gold Project Increasing Their Interest To 90%
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 LIMITED AND RANDGOLD RESOURCES JOINTLY ACQUIRE A FURTHER 20%
OF THE MOTO GOLD PROJECT INCREASING THEIR INTEREST TO 90%
AngloGold Ashanti Limited (JSE:ANG) ("AngloGold Ashanti" or the "Company") is
pleased to announce that, together with Randgold Resources Limited ("Randgold"),
it has entered into a definitive agreement with L`Office des Mines d`Or de Kilo-
Moto ("OKIMO"), whereby they will jointly purchase an additional 20% stake in
the Moto gold project (the "Moto Gold Project") for an aggregate consideration
of approximately US$113.6 million (the "Acquisition") The Acquisition
consideration is to be funded equally by AngloGold Ashanti and Randgold, with
AngloGold Ashanti`s 50% share of this consideration being approximately US$56.8
million which it will fund from existing cash resources.
On 15 October 2009, AngloGold Ashanti announced that, together with Randgold,
it had completed the acquisition of Moto Goldmines Limited ("Moto"), a gold
exploration and development company which holds a 70% interest in Kibali
Goldmines s.p.r.l. ("Kibali Goldmines"), a joint venture company which owns 100%
of the Moto Gold Project and in which OKIMO, a Congolese parastatal entity,
currently holds a 30% interest.
To implement the Acquisition, AngloGold Ashanti and Randgold have entered
into a share purchase agreement (the "SPA") with OKIMO, pursuant to which and
subject to the fulfilment of certain conditions precedent as set out below,
Kibali (Jersey) Limited ("Kibali (Jersey)"), a joint venture company that is
owned by AngloGold Ashanti and Randgold and the same vehicle which holds
AngloGold Ashanti`s and Randgold`s recently acquired joint venture interest in
Moto, will acquire 20% of the issued share capital of Kibali Goldmines from
OKIMO. Therefore, following completion of the Acquisition, Randgold and
AngloGold will together hold an indirect 90% interest in Kibali Goldmines and
OKIMO will hold the remaining 10% interest, thereby maintaining the continued
interest of the Government of the Democratic Republic of the Congo (the "DRC")
in the Moto Gold Project.
"This increases our participation in the Moto Gold project, which is an
important part of our future growth plans,`` AngloGold Ashanti CEO Mark Cutifani
said. ``We look forward to working closely with the DRC Government and
continuing our successful, decade-long partnership, with Randgold to bring this
resource to account.``
In addition to and as part of the Acquisition, AngloGold Ashanti and Randgold
have secured certain undertakings and commitments from the Government of the DRC
in respect of Kibali Goldmines` exploitation permits and licenses, as well as
the existing DRC mining legislation and the fiscal regime under which the Moto
Gold Project will operate. These undertakings are further detailed under the
Protocol and Declaration below.
Protocol
AngloGold Ashanti and Randgold have procured that Moto and Kibali (Jersey)
enters into a protocol (the "Protocol") with the Government of the DRC under
which:
1. the renewal of all the exploitation permits held by Kibali Goldmines will
be authorised by the Government of the DRC subject to compliance with the
provisions of the DRC mining legislation;
2. for such time as the Moto Gold Project is in commercial production and
provided that Kibali Goldmines complies with the DRC mining legislation, all
exploitation permits held by Kibali Goldmines shall be renewed on their
respective earliest renewal dates; and
3. the Government of the DRC acknowledges that no further payment shall be
required in relation to the acquisition of Moto by AngloGold Ashanti and
Randgold.
Under the terms of the Protocol, Moto will make a payment to the Government
of the DRC and OKIMO of US$4.5 million within three business days of the
delivery of certain documents by the Government of the DRC and OKIMO which are
conditions to the Acquisition and which should take place within 10 business
days of entering into the SPA. 50% of the payment will go to each of the
Government of the DRC and to OKIMO.
Declaration
AngloGold Ashanti and Randgold have secured additional support from the
Government of the DRC in the form of a declaration (the "Declaration") under
which the Government of the DRC:
1. formally acknowledges the Acquisition and the Protocol entered into by
Moto and Kibali (Jersey) in respect of the renewal of exploitation permits held
by Kibali Goldmines;
2. confirms that the current DRC mining legislation is in full force and
effect and that there are no current proposals to amend it;
3. confirms that the DRC mining legislation contains the totality of the
taxes, royalties and other fees payable to the Government of the DRC in relation
to mining activities in the DRC and guarantees the stability of these provisions
as provided in the DRC mining legislation;
4. provided that Kibali Goldmines complies with the DRC mining legislation
and payment is made under the Protocol, agrees to renew all of the exploitation
permits held by Kibali Goldmines on the terms of the Protocol and to grant in a
timely manner all other permits and licenses required for development and
exploitation of the Moto Gold Project;
5. provided that the Moto Gold Project is in commercial production, that
Kibali Goldmines complies with the DRC mining legislation and payment is made
under the Protocol, agrees to renew all exploitation permits held by Kibali
Goldmines on future renewal dates;
6. provided that payment is made under the Protocol, agrees not to terminate
or limit the scope or effect of Kibali Goldmines` exploitation permits other
than in accordance with their terms or in accordance with the provisions of the
joint venture agreement which governs the operation of Kibali Goldmines; and
7. undertakes not to take any action to prevent, prohibit or frustrate
future intra-group transfers by Randgold, AngloGold, Moto or Kibali (Jersey) of
shares in Kibali Goldmines and they will not be required to acquire a further
interest in Kibali Goldmines as a result of any such intra-group transfer.
Conditions Precedent
The Acquisition is subject to the fulfilment of a number of conditions,
including:
1. in the case of AngloGold Ashanti, approval of the Acquisition by the
South African Reserve Bank;
2. in the case of Randgold, approval of the Acquisition by its shareholders;
3. approval by the board of directors and the shareholders of OKIMO, such
approval to be granted within 10 business days of entering into the SPA;
4. the delivery, by the Government of the DRC within 10 business days of
entering into the SPA, of a notification letter regarding a meeting of the
Cabinet of the DRC confirming that it has considered the Acquisition and its
terms and that the Acquisition is in accordance with DRC law; and
5. the renewal of all exploitation permits held by Kibali Goldmines which
expire in 2014 pursuant to the Protocol.
Reasons for and Benefits of the Acquisition
It is anticipated that the Acquisition will result in the following benefits:
1. increases AngloGold Ashanti shareholders participation in the Moto Gold
Project, thereby further increasing AngloGold Ashanti`s Ore Reserves and Mineral
Resources: The Acquisition increases AngloGold Ashanti shareholders`
participation in the Moto Gold project by 10%, Based on the feasibility study
completed in March 2009 by Moto, the Acquisition in conjunction with the
acquisition of 50% of Moto completed earlier this month, will increase
AngloGold Ashanti`s existing attributable Ore Reserves by 2.5 Moz and its
existing attributable Mineral Resources by approximately 10.1 Moz. It is
envisaged that the vast Mineral Resource of the Moto Gold Project will support
the development of a long life and profitable mining operation. The Company
believes that the combination of AngloGold Ashanti`s and Randgold`s regional
business knowledge and government relationships with their extensive gold mining
expertise in Africa will assist in unlocking the value of the Moto Gold Project;
2. retains support of the Government of the DRC for the Moto Gold Project:
In addition to and as part of the Acquisition, AngloGold Ashanti and Randgold
have secured certain undertakings and commitments from the Government of the DRC
in respect of Kibali Goldmines` exploitation permits and licenses, as well as
the existing DRC mining legislation and the fiscal regime under which the Moto
Gold Project will operate. AngloGold Ashanti and Randgold both consider the
continued support of the Government of the DRC as critical to the successful
development of the Moto Gold Project;
3. removes a 20% carried interest in the Moto Gold Project: OKIMO currently
holds a 30% non-dilutable carried interest in the Moto Gold Project through its
holding in Kibali Goldmines. Under the current shareholding structure, this
would mean that AngloGold Ashanti and Randgold fund 100% of capital required to
develop the Moto Gold Project with only 70% of the benefit following repayment
of capital funding. The Acquisition reduces OKIMO`s holding to a 10% non-
dilutable carried interest and increases AngloGold Ashanti`s and Randgold`s
interest in the Moto Gold Project to 90%; and
4. simplifies the historic arrangements between Moto, Kibali Goldmines and
OKIMO: Historically, there have been a number of loans, commitments and
agreements in place between Moto, Kibali Goldmines and OKIMO in relation to the
Moto Gold Project which, under the new agreements, will be simplified.
Financial Advisors to AngloGold Ashanti
CIBC
HSBC
Legal Advisors to AngloGold Ashanti
Fasken Martineau DuMoulin LLP
Shearman & Sterling LLP
ENDS
31 October 2009
JSE Sponsor - UBS
Contacts
Alan Fine (Media) Tel: +27 (0) 11 637 6383 Mobile: +27 (0) 83 250 0757
E-mail: afine@anglogoldashanti.com
Joanne Jones (Media) Tel: +27 (0) 11 637- 6813 Mobile: +27 (0) 82 896 0306
E-mail: jjones@AngloGoldAshanti.com
Sicelo Ntuli (Investor) Tel: +27 (0) 11 637 6339 Mobile: +27 (0) 71 608 991
E-mail: sntuli@AngloGoldAshanti.com
Stewart Bailey (Investor) Tel: +1 212 836 4303 Mobile: +1 646 338 4337
E-mail: sbailey@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, 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 2008,
which was distributed to shareholders on 27 March 2009 and the company`s annual
report on Form 20-F, filed with the Securities and Exchange Commission in the
United States on May 5, 2009 as amended on May 6, 2009. 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: 02/11/2009 09:00:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
