| Thu 14 Nov 2002, 13:45 | | Anglo American Plc - Anglo American completes acqu |
|
Anglo American Plc - Anglo American completes acquisition of Disputada
Anglo American Plc
JSE Code: AGL
ISIN Code: GB0004901517
(The "Company")
Anglo American completes acquisition of Disputada
Subsidiaries of Anglo American plc ("Anglo American") today signed and completed
the $1.3 billion acquisition of 100% of the interests in the Compa$!a Minera
Disputada de Las Condes Limitada group ("Disputada") from affiliates of Exxon
Mobil Corporation ("ExxonMobil").
Disputada is a world class, integrated copper producer located in Chile and
comprising the Los Bronces and El Soldado mines and the Chagres smelter.
For further information:
London:
Investor Relations
Nick von Schirnding
+44 20 7698 8540
Media Relations
Kate Aindow
+44 20 7698 8619
Johannesburg:
Investor Relations
Anne Dunn
+27 11 638 4730
Media Relations
Marion Dixon
+27 11 638 3001
Further details:
Anglo American plc is one of the world`s largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in gold, platinum group metals and diamonds, with significant interests
in coal, base and ferrous metals, industrial minerals and forest products. The
group is geographically diverse, with operations in Africa, Europe, South and
North America and Australia. (www.angloamerican.co.uk)
Description of assets
Further exploration / exploitation potential
Purchase price / price participation
Synergies
Anglo American`s existing Chilean operations
1. DESCRIPTION OF ASSETS
Los Bronces mine
Description: long life, low cost, open pit mine
Location: 65 km north east of Santiago in Chile
2001 production: 171,000 tonnes of copper in concentrate
12,000 tonnes of copper cathode
2001 cash costs: 43 c/lb
Reserves (31/12/00): 457Mt @1.03% copper
plus 741Mt @ 0.47%
copper leach ore
Life of mine: minimum 20 years, potential to 30 years. Grade profile
relatively
flat over life of mine. Significant capital expenditure not required to
maintain production.
Added value potential:
expansion projects currently underway to expand copper production to 225,000
tonnes per annum by 2004
additional 200 million tonnes of resource grading 0.95% copper identified
immediately below or adjacent to existing pit (31/12/00)
further expansion potential
synergies
El Soldado mine
Description: medium life, medium cost, open pit mine and underground mine
Location: 132 km north of Santiago
2001 production: 64,000 tonnes of copper in concentrate
5,000 tonnes of copper cathode
2001 cash costs: 57 c/lb
Reserves
(31/12/00): 115Mt @ 1.00% copper
Life of mine: 16 years (estimated)
Added value
potential: nearby exploration synergies
Chagres Smelter
Description: recently modernised (1995) copper smelter
Location: 100 km north of Santiago
2001 production: 144,000 tonnes of copper (anode - 90% / blister -10%)
408,000 tonnes of acid
Process: Outokumpu flash furnace
Added value
potential: current capacity - 150,000 tonnes
potential production increase
synergies
Further Details:
The financial statements of Disputada for the year ended 31 December 2001, which
were prepared in accordance with US GAAP, showed Disputada`s net assets
(excluding net intercompany debt) as being $776 million, profit before interest,
tax and depreciation of $114 million and profit before tax of $38 million (net
of interest of $11 million on intercompany debt).
The principal and accrued interest on the intercompany loan acquired by Anglo
American at Completion amounted to $238 million.
2. FURTHER EXPLORATION / EXPLOITATION POTENTIAL
Los Bronces is located in a 70,000 hectare property owned by Disputada which has
excellent exploration and exploitation potential. In addition to the Los Bronces
mine reserves and the immediately adjacent resources, Disputada has already
identified over 300 million tonnes of additional resources at an average grade
of 0.85% copper.
3. PURCHASE PRICE / PRICE PARTICIPATION
Disputada is third party debt free.
A net consideration of $1.3 billion is payable on completion, such consideration
including the assumption by Anglo American of certain intercompany loan
accounts.
Anglo American will fund the net consideration from existing bank facilities and
internal cash resources.
Price Participation agreement:
ExxonMobil will be entitled to receive contingent payments, which will amount to
between zero and a maximum cumulative amount of $120 million if the average
copper price over the next three and a half years exceeds certain agreed
threshold levels as detailed below:
Nov 02 - May 03 - May 04 - May 05 -
April 03 April 04 April 05 April 06
Threshold 75 87 94 100
price
[c/lb
nominal]
Should, in any period, the copper price exceed the threshold price, Anglo
American and ExxonMobil will share equally in the incremental revenues
attributable to agreed production volumes in the relevant period subject to a
maximum cumulative amount payable to ExxonMobil of $120 million. If, in any
period, the average copper price does not exceed the threshold price, no
payments will be made to ExxonMobil in respect of that period. Should the full
$120 million not have been paid by May 2006, the shortfall will cease to be
payable.
In all years, the threshold levels in each period are higher than those used by
Anglo American in its valuation of Disputada. Accordingly, price participation
payments will only be made to ExxonMobil if the revenue forecasts for Disputada
are greater than that originally forecast by Anglo American.
4. SYNERGIES
The synergies between Disputada and Anglo American`s existing operations in
Chile are estimated to exceed an N.P.V. of $100 million. These include:
the Mantos Blancos and Disputada head offices will be combined into one head
office organisation which will act as a shared services facility for four mines
(Los Bronces, El Soldado, Mantos Blancos, Mantoverde,) and the Chagres smelter,
as well as continuing to provide input and support to the 44% owned Collahuasi;
procurement;
marketing, sales and logistics;
exploration - the exploration work of the two companies will be integrated;
further scope for substantial improvements in production, productivity and
costs.
5. ANGLO AMERICAN`S EXISTING OPERATIONS IN CHILE
Mantos Blancos comprises two 100% owned open pit copper mines. Mantos Blancos is
located in the Atacama desert near Antofagasta and Mantoverde is located south
of Antofagasta in the Copiapo region. In 2001, copper production was 156,800
tonnes at an average operating cash cost of 57.7 US cents per lb.
Collahuasi is an open pit copper mine located south east of Iquique in Chile.
Anglo American has a 44% interest and joint control of Collahuasi. In 2001,
copper production was 452,700 tonnes at an average operating cash cost of 39.5
US cents per lb. (Anglo American attributable production - 199,200 tonnes).
13 November 2002
Date: 14/11/2002 08:58:00 AM Produced by the JSE SENS Department
