AngloGold agrees the first of three big asset sales
Under new CEO Kelvin Dushnisky, AngloGold Ashanti has sold Sadiola mine to Allied Gold, with others in SA and Argentina on the table
AngloGold Ashanti finalised the sale of the first of its three big assets new CEO Kelvin Dushnisky has put up for sale, with Sadiola mine sold to Allied Gold for $105m (R1.5bn) cash.
Sadiola was jointly owned with Canada’s IAMGOLD and the partners agreed to sell their equally held 82% stake in the mine in Mali; the government owns the balance.
Dushnisky put Sadiola, Cerro Vanguardia in Argentina, and Mponeng and a tailings treatment business in SA up for sale during his first year as CEO as AngloGold focuses on reducing debt and investing in best-return assets.
“This transaction is in line with our disciplined, capital allocation strategy as we move to streamline our portfolio and intensify our focus on assets that have potential to build critical mass in the long term,” Dushnisky said on Monday.
One of the projects AngloGold has is the Obuasi mine in Ghana, which was shut for five years to be redesigned and redeveloped as a modern, mechanised operation after years of underperformance. Obuasi poured its first gold last week.
AngloGold and its partner agreed to sell Sadiola after failing to secure economically favourable terms from the Malian government on a project to extract sulphide ore, ensuring the future of the mine. Dushnisky made the announcement in November 2018, shortly after starting as AngloGold CEO.
Sadiola generated 39,000oz of gold for AngloGold in the nine months to end-September at an all-in sustaining cost of $954/oz.
Allied Gold is a Dubai-based, privately owned company, which owns and operates the Bonikro and Hiré gold mines in Ivory Coast. It is exploring for gold in Ethiopia, Egypt and Tanzania.
The purchase of Sadiola by Allied Gold will be made in phases, with an upfront payment of $50m split between AngloGold and IAMGOLD once all conditions precedent are met. The deal is expected to be closed in April 2020.
Once the deal is closed, Allied Gold will make a $5m payment eight days later to be split between the two companies. The remaining $50m will be split into two payments.
The first $25m will be paid once Sadiola achieves 250,000oz of gold production from its Sadiola sulphides project, then the balance once it repeats that output.
An additional windfall for the owners of Sadiola will come from a $15m dividend payment from the mine immediately before the deal is concluded, with AngloGold and IAMGOLD each receiving $6.15m and the Malian government $2.7m.
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