Navachab mine sold for N$1,2 billion

ANGLOGOLD announced yesterday that it had signed a binding agreement to sell its entire interest in AngloGold Ashanti Namibia, a wholly owned subsidiary, which owns the Navachab Gold Mine to a wholly owned subsidiary of the UK-based QKR Corporation Limited.

The mine is valued at US$110 million (just over N$1,2 billion) and the deal will be adjusted to take into account Navachab’s net debt and working capital position when the deal is finalised.

“In addition, AngloGold Ashanti will receive deferred consideration in the form of a net smelter return,” AngloGold said.

The smelter return is to be paid quarterly for a period of seven years, following the second anniversary of the deal and will be determined at two percent of the ounces sold by Navachab during a relevant quarter subject to an average gold price of US$1 350 per ounce being achieved and capped at 18 750 ounces sold per quarter.

The deal is subject to approval by Namibian and South African regulatory authorities and third party approvals, which are expected to be obtained over the next several months.

“We are executing on our strategy to focus our efforts on assets of scale that drive value in the business,” said Charles Carter, AngloGold Ashanti’s Executive Vice President of Strategy and Business Development. “We’re pleased to have reached agreement to sell Navachab for fair value in the midst of a difficult market, we believe that QKR is the right group to take Navachab forward.”

Lloyd Pengilly, President of QKR, noted that “Navachab is QKR’s first acquisition and is the result of an extensive review process. We believe Navachab has significant potential and we look forward to working closely with the management, staff and contractors of Navachab, the Government of Namibia and Epangelo to steer the mine through its next phase of growth.”

AngloGold Ashanti will continue to operate Navachab until the deal is finalised. Navachab has been owned and operated by AngloGold Ashanti since the company was formed in 1998. As at 31 December 2012, Navachab had gold mineral resources of 4 410 000 ounces and gold ore reserves of 2 100 000 ounces. In the year ended 31 December 2012, Navachab produced 74 000 ounces of gold at a cash cost of US$929 per ounce and for the nine months ended 30 September 2013 produced 46 000 ounces of gold at a cash cost of US$755 per ounce. Navachab’s contribution represents less than two percent of AngloGold Ashanti’s total production.

QKR is a private mining company focused on acquiring and building a diversified portfolio of development and growth assets in the EMEA region and the Americas.