) has entered into a binding agreement to sell its entire
interest in AngloGold Ashanti Namibia (Proprietary) Limited
(AGAN) to a fully-owned subsidiary of QKR Corporation Limited
(QKR) for an upfront consideration based on an enterprise value
of $110 million.
AGAN, which is a wholly-owned subsidiary of AngloGold, owns
the Navachab Gold Mine. The upfront payment is subject to
adjustment of AGAN's net debt and working capital position on the
closing date of the transaction. QKR will pay the upfront
consideration in cash on transaction closure.
Along with the upfront consideration, AngloGold will also
receive a deferred consideration in the form of a net smelter
return (NSR) to be paid quarterly for a period of seven years
following the second anniversary of the closing date.
NSR to be paid will be determined at 2% of gold ounces sold by
Navachab during a relevant quarter at an average gold price of
$1,350 per ounce being achieved and capped at 18,750 ounces sold
per quarter. Operations at Navachab will continue to be conducted
by AngloGold till the closing date of the transaction.
The deal's closure depends on fulfillment of a number of
precedents, including Namibian and South African regulatory and
third party approvals, which are expected to be obtained over the
next several months.
As of Dec 31, 2012, Navachab gold mine had gold mineral
resources of 4,410,000 ounces and gold ore reserves of 2,100,000
ounces. The mine produced 74,000 ounces of gold at a cash cost of
$929 per ounce in the year ended Dec 31, 2012.
The financial advisor to AngloGold for the transaction is CIBC
World Markets plc. ENS, Africa is the legal advisor while UBS
South Africa (Pty) Limited is sponsor to AngloGold.
AngloGold carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining industry are
Lake Shore Gold Corp.
Alexco Resource Corp.
), all of which carry a Zacks Rank #2 (Buy).
ANGLOGOLD LTD (AU): Free Stock Analysis
ALEXCO RESOURCE (AXU): Free Stock Analysis
FRANCO NV CP (FNV): Free Stock Analysis
LAKE SHORE GOLD (LSG): Free Stock Analysis
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