AngloGold Ashanti receives approval to sell its South African mines

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SOUTH AFRICA –AngloGold Ashanti has announced that it has met all the conditions with respect to the sale of its remaining mines in South Africa to Harmony Gold Mining Company Limited.

It includes the unconditional approval by the Department of Mineral Resources and Energy for the transfer of the West Wits mineral rights from AngloGold Ashanti to Harmony.

Consequently, the transaction is scheduled to close in accordance with the earlier transaction agreement on 30 September 2020, upon which Harmony will assume full ownership and operation of all assets and liabilities that form part of the transaction.

In a press statement, the mining giant said that AngloGold Ashanti is well-positioned to safely deliver better returns as its focus narrows on growing free cash flow and shareholder dividends while investing in its next generation of opportunities.

“While the decision to sell our South African assets was not an easy one, we are pleased that the assets are going to Harmony, a capable and responsible operator that will ensure their long-term sustainability,” Christine Ramon, Interim CEO of AngloGold Ashanti said.

 “We can now sharpen our focus to pursue high return projects at several of our key assets, deliver new ounces from the world class Obuasi mine in Ghana and advance studies in Colombia, a new frontier for our business,” she added.

The statement further said that consideration for the transaction is in cash and deferred payments with expected proceeds of around $300 million, subject to subsequent performance and with additional proceeds if the West Wits are developed below current infrastructure.

Harmony will pay US$200 million in cash on completion of the transaction.

 Harmony has also agreed to pay to AngloGold Ashanti a  contingent  compensation  of  US$260  per  ounce  on  underground  gold  production  from  the Mponeng, Savuka and TauTona mines that exceeds 250,000 ounces per annum for a period of six years commencing on 1 January 2021which is valued at approximately US$100 million based on AngloGold Ashanti’s current production forecast.

In addition to that, Harmony will also pay a contingent compensation of US$20 per ounce in relation to underground production sourced within  the  West  Wits  mineral  rights  (comprising  the  Mponeng,  Savuka  and  TauTona  mines) below the current infrastructure if it is developed.

AngloGold Ashanti is also in the process of selling its assets in Mali.

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