AngloGold sells Amapari to Eike Batista (May 23, 2003)

AngloGold (AU-N) will sell its wholly-owned Amapari gold project in northeastern Brazil’s Amapa state to Eike Batista’s wholly owned Mineracao Pedra Branca do Amapari for US$18.2 million.

AngloGold acquired the Amapari assets in 1998 as part of its combination with Anglo American subsidiary Minorco, and then carried out an extensive drilling campaign that delineated reserves of 9.8 million tonnes grading 2.29 grams gold per tonne, or 721,000 contained oz. gold.

“Although it has been a difficult decision to dispose of the property, AngloGold has realized a fair price for it and I am pleased that the project will be completed,” said Roberto Carvalho Silva, regional head for AngloGold South America, in a release.

Amapari’s buyer, Batista, has a reputation as a fast-living Brazilian millionaire but is best known to North Americans as the founder of TVX Gold, which was formed out of Inco’s gold assets in the late 1980s and was recently acquired by Kinross Gold.

AngloGold still operates two profitable gold mines in Brazil: Morro Velho, near Belo Horizonte region; and Serra Grande, near Crixas.

The 100%-owned underground Morro Velho mine produced 53,000 oz. gold in the first quarter at a total cash cost of US$127 per oz., for an operating profit of US$11 million.

Ownership in Serra Grande is equally split between operator AngloGold and Kinross (the latter stake acquired through the TVX purchase). The two-mine complex yielded 48,000 oz. gold in the first quarter at a total cash cost of only US$93 per oz., for an operating profit of US$5 million.

AngloGold is continuing its grassroots gold exploration in Brazil at its Lamego project near Cuiaba, where drilling has intersected 10-metre-thick mineralization grading 5-10 grams gold at depths of 250 to 350 metres below surface. Mineralization appears to be open to the south.

At the Corrego do Sitio gold project, AngloGold is developing a ramp to access sulphide mineralization, with drilling ahead of the ramp having already intercepted 6 metres grading 38.9 grams per tonne.