Namibia’s sole gold mine sold for US$110m

AngloGold Ashanti NamibiaWINDHOEK. — Navachab mine, Namibia’s only operational gold mine has been sold to UK-based private mining group QKR for US$110 million. After months of speculation, the Johannesburg head-quartered AngloGold Ashanti announced on Monday that it has 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 subsidiary of mining upstart QKR Corporation Limited.

The deal is subject to regulatory approvals in Namibia and South Africa. Navachab has been owned and operated by AngloGold Ashanti since 1998. The Namibian unit contributes less than 2 percent of AngloGold’s total production, mineral resources and ore reserves.

Anglo Gold Ashanti said Navachab had gold resources of 4 410 000 ounces and gold reserves of 2 100 000 ounces as at December 31, 2012. In the nine months to September 2013, the mine had produced 46 000 ounces of gold at a cash cost of US$755 per ounce.

The agreement provides for an upfront consideration based on an enterprise value of US$110 million which will be adjusted to take into account Anglo Gold Ashanti Namibia’s net debt and working capital position on the closing date of the transaction. The upfront consideration is payable in cash on the closing date.

In addition, AngloGold Ashanti will receive deferred consideration in the form of a net smelter return (NSR). The NSR is to be paid quarterly for a period of seven years following the second anniversary of the closing date and will be determined at 2 percent of ounces sold by Navachab during a relevant quarter subject to an average gold price of 1,350 U.S. dollars per ounce being achieved and capped at 18,750 ounces sold per quarter.

“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 in a statement.

AngloGold Ashanti will continue to operate Navachab until the closing of the transaction. — Xinhua.

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