AngloGold sells underperforming SA gold mines


AngloGold sells underperforming SA gold mines

Published Date: 2017-10-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

AngloGold sells underperforming SA gold mines

The transactions will almost halve the company's SA production

AngloGold Ashanti is wasting no time in cutting its exposure to its loss-making South African mines, selling a number of its local assets to Harmony Gold Mining and China's Heaven-Sent SA Sunshine Investment Company.

AngloGold said it was restructuring mines, including Kopanang, near Klerksdorp west of Johannesburg, when it received a number of unsolicited approaches for the mine. Heaven-Sent already holds a 74% interest in Village Main Reef, which owns and operates the Tau Lekoa Gold Mine in the Vaal River Region. It will pay R100 million for the mine, which will be scaled back with a reduced workforce. AngloGold says it will still pay severance packages to all employees at the mine, which would have otherwise been placed on care and maintenance.

Harmony is paying $300 million for the Moab Khotsong underground mine, in the Vaal River region, which incorporates the Great Noligwa mine and related infrastructure.

Following the sale of Moab and Kopanang AngloGold Ashanti says it will no longer have any underground mining operations in the Vaal River region. The sales will cut AngloGold's South African production to 13.4% of total production from just under 25%.

Related article: AngloGold deal could stave off Kopanang closure

Harmony says Moab Khotsong will be value accretive and will enhance its position as a cash-generative gold mining company. The deal will add annual gold production of more than 250koz and at all in sustaining cost below the group's rage of $950/oz.

AngloGold climbed 3.2% yesterday to end trade at R128.45, while Harmony fell 3.1% to R22.68.

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