Joint bidders
R1.8 billion is payable on completion of the transaction, which will take effect Jan. 1, 2002; the balance of R400 million is payable in three year’s time. South African tax authorities are expected to approve the agreement as a “rationalization” scheme, in which case AngloGold will not be taxed on the proceeds of the sale.
Among the Free State assets are: the Bambanani, Joel, Matjhabeng and Tshepong mines; all mineral rights in the Welkom and southern Free State goldfields; and associated infrastructure, including metallurgical plants and commercial and residential properties.
Says AngloGold Chairman Bobby Godsell: “It is our strategic objective to develop, acquire and operate long-life, low-cost, world-class gold mining assets and to close or to sell mines approaching the end of their profitable lives to operators who are better suited to extracting value from such assets. With the exception of Tshepong, the Free State mines fall into the latter category.”
The four mines produced 1.3 million oz. in the 2000 calendar year at an average cash cost of US$270 per oz. For the first nine months of 2001, they produced 908,000 oz. at a cash cost of US$233 per oz. and a total production cost of US$274 per oz., accounting for 17.3% of Anglo’s worldwide production and 8.3% of its earnings.
The acquisition of AngloGold’s assets represents a first step in the consolidation of the Free State region. The mines are contiguous to Harmony’s and ARM’s existing operations.
The deal especially strengthens Harmony’s position in the Free State region and is expected to result in operational and production “harmony” with its existing operations.
“The acquisition is in line with ARM’s growth strategy of increasing its production of 525,000 oz. per annum to 1 million oz. per annum — making ARM the 10th-largest gold company in the world,” states Patrice Motsepe, that company’s executive chairman. “We will now have the critical mass to proceed with listing during the course of 2002.”
The Harmony-ARM joint venture also has the exclusive right to negotiate the acquisition of
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