| Tue 29 May 2012, 8:00 | | ANG - AngloGold Ashanti - Anglogold Ashanti secures 100% ownership of Serra |
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ANANO
ANG - AngloGold Ashanti - Anglogold Ashanti secures 100% ownership of Serra
Grande
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 SECURES 100% OWNERSHIP of SERRA GRANDE
AngloGold Ashanti, which currently holds, through its subsidiaries, a 50%
interest in the Serra Grande (Crixas) mine in Brazil, has agreed to acquire the
remaining 50% stake in the mine from Kinross Gold Corporation ("Kinross") for
US$220 million in cash ("the transaction"). The transaction will be funded from
existing cash reserves and debt facilities and remains subject to various
conditions, detailed below.
In 2011, the Serra Grande mine produced 134,000oz of gold at a cash cost of
US$767/oz. The Serra Grande operation comprises three underground mines, namely
Mina III, Mina Nova and Mina Palmeiras, and one open pit mine on the outcrop of
the Mina III mineralised zone (between surface and level 50) as well as a single
dedicated processing plant. To date the Serra Grande mine, which is operated by
AngloGold Ashanti, has produced 3.4Moz of gold.
The acquisition, which will entitle AngloGold Ashanti to 100% production from
Serra Grande, is expected to increase AngloGold Ashanti`s annual attributable
production from Brazil to well in excess of 500,000oz and the contribution from
the Americas region as whole to more than 1Moz.
The transaction is expected to provide a number of benefits to AngloGold
Ashanti, including:
- Enhancing AngloGold Ashanti`s production, Ore Reserve and Mineral Resource
profiles by approximately 70,000oz a year, 375,000oz and 1.186Moz respectively;
- Making a positive contribution toward AngloGold Ashanti`s near term gold
production profile in Brazil, which the company views as a key jurisdiction in
its portfolio. Annual production from AngloGold Ashanti`s Brazilian operations
is expected to increase from 428,000oz in 2011 to between 540,000oz to 550,000oz
whilst annual gold production in the Americas region is projected to increase to
more than 1Moz per annum;
- Securing 100% ownership of the Serra Grande mine in AngloGold Ashanti`s
hands with no concomitant increase in management costs; and
- Providing AngloGold Ashanti with full exposure to further exploration
potential at the Serra Grande mine, where more than 1.0Moz of Mineral Resources
have been added over the past four years. AngloGold Ashanti anticipates that
these additional resources and the exploration potential that exists at the site
create the opportunity to further extend the life of Serra Grande.
"This deal further simplifies our portfolio and gives us greater exposure to
Brazil, where we`ve had significant success in growing our production as well as
our reserve and resource base," Mark Cutifani, AngloGold Ashanti`s Chief
Executive Officer, said. "We see long-term, lower risk, potential from Serra
Grande, which is a key component of our strategy to grow the contribution from
the Americas."
Terms of the Transaction
Under the terms of the transaction, AngloGold Ashanti`s wholly owned
subsidiary, AngloGold Ashanti Brasil Mineracao Ltda. will acquire Kinross` 50%
interest in Mineracao Serra Grande S.A. ("MSG"), the principal asset of which is
the Serra Grande mine, from Newinco Comercio e Partcipacoes Ltda ("Newinco") a
subsidiary of Kinross which holds its 50% interest in MSG. Newinco has provided
customary warranties and indemnities in respect of its 50% share of certain tax
claims against MSG. Kinross has provided a parent guarantee in respect of the
obligations of Newinco under the transaction agreements.
The parties are required to file a notification of the transaction with the
Brazilian anti-trust authorities. The transaction is also subject to the
fulfilment of various conditions, including:
- the unconditional approval of the South African Reserve Bank of the
transaction, in accordance with the Exchange Control Regulations of the Republic
of South Africa; and
- no material adverse event (as defined in the transaction agreement) having
occurred.
The transaction is expected to be completed during the second quarter of
2012.
Johannesburg
29 May 2012
Primary Legal Advisers: Slaughter and May
Sponsor: UBS
ENDS
Contacts
Tel: E-mail:
Alan Fine (Media) +27 11 637 6383 afine@AngloGoldAshanti.com
Chris Nthite (Media) +27 (0) 11 637 6388 cnthite@anglogoldashanti.com
Mike Bedford (Investor) +27 11 637 6273 mbedford@anglogoldashanti.com
Stewart Bailey(Investor) +1 2128364303 sbailey@anglogoldashanti.com
Certain statements made in this communication, including, without limitation,
those concerning the economic outlook for the gold mining industry, expectations
regarding gold prices, production, cash costs and other operating results,
return on shareholders` equity, productivity improvements, 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 the completion of
acquisitions and dispositions, AngloGold Ashanti`s liquidity, capital resources
and capital expenditure and the outcome and consequences of any potential or
pending litigation or regulatory proceedings or environmental issues, are
forward-looking statements regarding AngloGold Ashanti`s operations, economic
performance and financial condition. These forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause
AngloGold Ashanti`s actual results, performance or achievements to differ
materially from the anticipated results, performance or achievements expressed
or implied in these forward-looking statements. 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 including
environmental approvals and actions, fluctuations in gold prices and exchange
rates, and business and operational risk management. For a discussion of
certain of these and other factors, refer to AngloGold Ashanti`s annual report
for the year ended 31 December 2011, which was distributed to shareholders on 4
April 2012 and the company`s 2011 annual report on Form 20-F, which was filed
with the Securities and Exchange Commission in the United States on April 23,
2012. These factors are not necessarily all of the important factors that could
cause AngloGold Ashanti`s actual results to differ materially from those
expressed in any forward-looking statements. Other unknown or unpredictable
factors could also have material adverse effects on future results.
Consequently, readers are cautioned not to place undue reliance on forward-
looking statements. 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, except to the extent required by applicable law. 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.
This communication may contain certain "Non-GAAP" financial measures. AngloGold
Ashanti utilises certain Non-GAAP performance measures and ratios in managing
its business. Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the reported operating results or cash flow from
operations or any other measures of performance prepared in accordance with
IFRS. In addition, the presentation of these measures may not be comparable to
similarly titled measures other companies may use.
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: 29/05/2012 08:00:04 Produced by the JSE SENS Department.
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