The Department of Mineral Resources and Energy (DMRE) has also given its unconditional approval for the transfer of the West Wits mineral rights from AngloGold Ashanti to Harmony.
AngloGold Ashanti is well-positioned to safely deliver better returns as its focus narrows 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," Christine Ramon, interim CEO of AngloGold Ashanti said.
Consideration for the transaction is in cash and deferred payments with expected proceeds of around $300m, subject to subsequent performance, and with additional proceeds if the West Wits are developed below current infrastructure. Harmony will pay $200m in cash on completion of the transaction. Furthermore, Harmony has agreed to pay to AngloGold Ashanti:
The transaction is in line with AngloGold Ashanti’s aim to continually improve its portfolio and supports its disciplined approach to the allocation of capital and other resources to ensure maximum value generation for all shareholders. This, together with the pending sales of the company’s assets in Mali, will result in a streamlined, high-margin business with quality assets and a robust pipeline for growth. Gross cash proceeds from the transaction will be applied to further debt reduction.