AngloGold Ashanti to Split Assets; Create New UK Company
Following the BHP Billiton’s demerger last month, AngloGold Ashanti (JSE:ANG) (LSE:AGG) (NYSE:AU) is set to restructure its international mining operations by splitting its non-South African assets into a newly created UK-based company.
The new entity, which will be called Newco, has received approval from the South African Reserve Bank (SARB) and will own AngloGold’s portfolio of gold production and exploration assets located outside South Africa.
“Our decisive response to a challenging gold price environment has seen us return to growth, aggressively reduce costs and improve free cash flow, all while posting a record safety performance,” AngloGold CEO Srinivasan Venkatakrishnan said.
As part of its division process, which will required shareholder approval, AngloGold will sell $2.1 billion of shares to pay down “unsustainable debt” as it seeks to revitalize a business battered by the long-term decline in gold prices.
"It has become increasingly clear that the two distinct parts of our portfolio require different strategies, focused management, and should be appropriately capitalized to realize their full potential and unlock further value for shareholders,” AngloGold Ashanti chairman Sipho Pityana said.
"In South Africa we will create a standard bearer for the mining industry with a structure allowing it to chart an exciting growth trajectory while allowing investors to properly value its high-quality, cash generative portfolio."
Newco will seek a premium listing on the London Stock Exchange, an inward listing on the Johannesburg Stock Exchange and a listing of American depositary receipts on the New York Stock Exchange.
Although AngoGold is splitting its business from South Africa, the company has full confidence in the country.
"I disagree about bunching all these transactions together. This is a different transaction. We are based in SA. We remain domiciled in SA. We are not shedding our South African assets. We see an opportunity to generate value on both legs of the equation by unlocking our South African assets separately and retaining a majority stake in Newco," Venkatakrishnan said.
"It’s got nothing to do with a view of SA. This would have happened regardless of the jurisdiction. It’s not driven by geography but driven by value unlock."
As for the new company, Charles Carter will become Newco’s CEO with Ron Largent as president and chief operating officer. Pityana and Venkatakrishnan would initially serve as non-executive director on the Newco board, with Pityana as deputy chairman.
AngloGold will initially hold 65 percent of Newco while the remaining 35 percent will be unbundled to shareholders.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.