Navachab Gold Mine sold

Navachab Gold mine, the country’s only producing gold mine has been sold to a UK-based private mining group QKR for US$110 million.
AngloGold Ashanti, the South African-based global gold producer announced this 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. Selling Navachab was first mooted in March 2013 without naming any specific buyer. The Namibian unit, which has been owned and operated by AngloGold Ashanti since 1998, contributes less than 2% of AngloGold’s total production, mineral resources and ore reserves. In a statement announcing details of the sale agreement, Charles Carter, AngloGold Ashanti’s Executive Vice President of Strategy and Business Development said: “We are executing on our strategy to focus our efforts on assets of scale that drive value in the business.” sNavachab had gold resources of 4,410,000 ounces and gold reserves of 2,100,000 ounces as at 31 December 2012, and in the nine months to September last year, the Karibib-based mine produced 46,000 ounces of gold at a cash cost of US$755 per ounce.

The agreement with QKR 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. Lloyd Pengilly, President of QKR, said “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.” 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% of ounces gold 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.  AngloGold Ashanti will continue to operate Navachab until the closing of the transaction.