Related Articles
Top Stories
Feb 13 2012 12:15
Miner Xstrata says it has brought forward maintenance on two furnaces to assist Eskom to save power.
Feb 13 2012 10:43
Although jobs were created, the economy is still 420 000 jobs short of the peak employment level before the 2009 global financial crisis, says Adcorp.
Feb 13 2012 07:58
Greek lawmakers have approved a new round of drastic austerity measures after a long day of street battles between police and protesters left dozens injured.
Johannesburg - AngloGold Ashanti has agreed to sell its one third stake in the Boddington mine in Australia to Newmont for $1.1bn as part of the South African company's strategy of shedding assets it deems non-core and easing it debt burden.
"The transaction is consistent with AngloGold Ashanti's strategy of focusing on its core, controlled asset portfolio and realising value from any minority, non-managed interests as and when appropriate," the company said.
The Boddington mine was under development in 2008 and did not generate revenue. Newmont will own 100% of the project and its proven and probable reserves of 20 million ounces.
"It will also immediately strengthen the Company's balance sheet, result in lower financing costs due to early repayment of the recently announced US$1bn bridge facility and create additional flexibility to participate in further investment and growth opportunities," it said.
The transaction will also strip A$269m out of AngloGold's capital budget for this year.
"This provides us with funding flexibility to deliver on our growth opportunities, while we also continue to reduce our hedge book and deliver on our commitment to create compelling value for our shareholders," said CEO Mark Cutifani, adding AngloGold could now take advantage of opportunities that came up.
There are a number of distressed companies that are unable to bring projects into production or raise capital towards expansion. These companies are likely to become targets for others that have producing assets and cash flow.
The deal with Newmont will include a cash payment of $750m once all the conditions for the transaction are finalised. Another $240m will be paid in cash on 31 December 2009 or Newmont shares and cash on or before 10 December. There is also a royalty component capped at $100m.
v
"Newmont has informed AngloGold Ashanti that it has received a commitment for a $1bn bridge facility in order to fund the Transaction and associated capital expenditure for the Boddington Gold Mine. This financing remains subject to customary closing conditions," AngloGold said in a statement.
The completion of the deal is subject of the meeting of a number of conditions.
Boddington, which will cost up to $2.9bn, comes into start production in mid-2009, ramping up to full production of one million ounces a year over 12 months.
- Miningmx.com
For more mining sector coverage, visit miningmx.com.