AngloGold Ashanti enters into agreement to sell the Bibiani Mine
Wednesday, August 23, 2006 - AngloGold Ashanti has entered into an agreement with Central African Gold plc (CAG) to sell its entire business undertaking related to the Bibiani mine and Bibiani North prospecting permit to CAG for a cash consideration of US$40 million.
Bibiani is located in southwestern Ghana. For the six months ended 30 June 2006, Bibiani produced 24,000 ounces of gold at a total cash cost of US$329 per ounce. As at 31 December 2005, Bibiani had Ore Reserves of 100,000 ounces and Mineral Resources of 900,000 ounces.
Pursuant to the sale, AngloGold Ashanti will transfer of all of its assets related to Bibiani to CAG, including all of Bibiani’s employees, fixed mining and non-mining assets, inventory, trade debtors and intellectual property as well as the Bibiani mining lease and the Bibiani North prospecting licence, and procure the cession and delegation of all contracts related to Bibiani to CAG. CAG will assume all of AngloGold Ashanti’s rights and obligations under this agreement in terms of the Reclamation Security Agreement related to Bibiani (including all amounts deposited by AngloGold Ashanti in respect of its obligations under this agreement upon closing of the sale). CAG will also assume all outstanding liabilities related to Bibiani, including those related to rehabilitation and employees but excluding certain claims previously instituted against AngloGold Ashanti.
The sale is subject to and conditional upon both parties obtaining certain regulatory consents, including written unconditional consent from the Government of Ghana, the Minister of Mines and the Minerals Commission in Ghana, as well as the South African Reserve Bank, and, in the case of CAG, shareholder approval to both acquire Bibiani and to readmit the listing of its shares on AIM, as well as CAG raising sufficient funds to allow it to discharge its obligations in terms of its agreement with AngloGold Ashanti. The cash consideration of $40m is made up of $36m for the Bibiani mine and $4m for Bibiani North. The transaction with respect to Bibiani North is conditional upon the granting of an extension of the Bibiani North prospecting licence.
BMO Capital Markets acted as exclusive financial adviser to AngloGold Ashanti in respect of the tender process culminating in the agreement with CAG. Tabacks acted as legal adviser to AngloGold Ashanti.
Commenting on the transaction, Daniel Owiredu, AngloGold Ashanti’s Deputy Chief Operating Officer in Accra said, ‘The sale of Bibiani will allow AngloGold Ashanti to better focus its resources on its long-life, core assets, including Obuasi and Iduapriem in Ghana, which remains a key production region for the company’. He went on to say, ‘It is our understanding that CAG will continue to operate and develop Bibiani, including the Mineral Resources below and adjacent to the existing open-pit and will as well undertake further greenfields exploration in Bibiani North’.
Except for historical information contained herein, there are matters discussed in this news release that are forwardlooking statements. Such statements are only predictions and actual events or results may differ materially. For discussion of important factors including, but not limited to development of the Company’s business the economic outlook in the gold mining industry, expectations regarding gold prices and production, and other factors, which could cause actual results to differ materially from such forward-looking statements, refer to the Company’s annual report on the Form 20-F for the year ended 31 December 2005 dated 17 March 2006 which was filed with the Securities and Exchange Commission on 20 March 2006.
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- AngloGold Ashanti
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