AngloGold Ashanti will sell its Tau Lekoa mine as well as the adjacent Edgenoeg and Weltevreden project areas to smaller miner Simmer & Jack mines, it said in a statement late on Tuesday.
AngloGold Ashanti said it had agreed to sell the operations to Simmers for R600-million plus royalties of 3%.
AngloGold said the transaction was consistent with its strategy of active portfolio management ”to focus human and financial resources on core operations”.
Tau Lekoa is one of the smallest of AngloGold Ashanti’s South African operations and is both geographically and geologically separated from the company’s other Vaal River mines.
”The Ventersdorp contact Reef as mined at Tau Lekoa is generally of a lower gold grade and also does not contain uranium in meaningful quantities as compared to the Vaal Reef as mined at the company’s other Vaal River mines,” the company said.
”The transaction will act to strengthen our balance sheet further and after an orderly transition process will enable us to focus our key human resources and financial resources across our strategic asset base
and growth initiatives,” said Mark Cutifani, CEO of AngloGold.
The transaction would be subject to Simmers raising the cash required as well as approval by Simmers’ shareholders and competition authorities.
In a separate statement on Wednesday, Simmers said its directors believed that the acquisition was ”transformational” for its gold business in providing scale, diversifying production risk and providing operational synergies with its existing Buffelsfontein Gold Mines (BGM) operations.
Simmers said the acquisition would be made through BGM — which is a wholly owned subsidiary of Simmers.
”The acquisition is a major step forward in achieving the company’s growth objective of becoming a million ounce per annum producer by 2012.
”Tau Lekoa is a relatively low-cost, low-risk asset that provides the company with an ideal platform to benefit from regional synergies by creating the opportunity to utilise existing plant capacity at Buffelsfontein Gold Mine,” Gordon Miller, CEO of Simmers, said.
In the process, substantial value to Simmers’ wholly-owned gold business would be added — with the advantage of additional up-side potential from the development of Weltevreden, Miller added. – Sapa