Harmony Gold concludes acquisition of AngloGold Ashanti's SA assets
Interim CEO Christine Ramon: AngloGold Ashanti well-positioned to deliver better returns.
Harmony Gold has concluded its acquisition of AngloGold AShanti’s South African assets, Mponeng mine and Mine Waste Solutions, for R5 billion.
According to a statement, the transaction is scheduled to close at the end of the month after all conditions precedent have been met, including the approval by the Department of Mineral Resources and Energy to transfer the West Wits mineral rights from AngloGold Ashanti to Harmony.
Harmony said that, aside from improving its portfolio mix between the surface and underground operations, the transaction had the potential to improve the group’s overall recovered grade and increased cash flow margins.
AgloGold Ashanti sold the assets to Harmony in a bid to streamline its portfolio in line with its capital allocation framework.
AngloGold Ashanti’s interim CEO and former CFO Christine Ramon said the group was well-positioned to safely deliver better returns as its focus narrowed 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. 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.”
The proceeds from the transaction will be applied to further debt reduction.
Harmony will pay $200 million (R3.35 billion) in cash on completion of the transaction and a further compensation of $260 per ounce on underground gold production from the Mponeng, Savuka and TauTona mines that exceeds 250,000 ounces a year for six years starting on 1 January 2021.