Sept 10 (Askume) – Chief Executive Alberto Calderon said on Tuesday AngloGold Ashanti will now buy smaller Egypt-focused rival Centamin ( CEY.L
Centamin shares rose more than 20% to their highest level since October 2020, while London-listed peer Hochschild (HOCM.L) rose more than 2.5%. Shares in New York-listed AngloGold (AU.N) were down 8% by 1548 GMT.
Calderon, who was appointed CEO in 2021, said AngloGold had been trying to “put its house in order” for the past three years before looking for a takeover target.
“At some point we will start looking for transactions that will increase our focus on Tier 1 assets,” Calderon said in an interview, referring to high-value, low-cost projects or long-term operations.
“This presents a number of interesting strategic opportunities for AngloGold,” he said.
Calderon said AngloGold’s focus on primary assets meant it would be “very open” to selling Centamin’s Doropo project in Ivory Coast, as well as existing Brazilian assets Corrego do Sitio and Serra Grande.
Under the terms of the deal, Centamin shareholders will receive 0.06983 new AngloGold shares and $0.125 in cash for each Centamin share.
The proposed price is 163 pence ($2.14) per share, a 36.7% premium to Centamin’s closing price of 120 pence on Monday, the companies said in a statement.
The acquisition coincides with a surge in deal activity in the gold mining industry over the past few years, including the $16.8 billion acquisition of Australia’s Newcrest Mining by the world’s top gold producer Newmont NEM.N in late 2023.
After trying to acquire Osisko Mining (OSK.TO) two years ago, on Aug. 12 AngloGold Peer Gold Fields (GFIJ.J) announced it would acquire Osisko Mining (OSK.TO) for 2.16 billion Canadian dollars ($1.59 billion) .Rival bids from another Canadian mining company, Yamana Gold Eagle (AEM.TO) and Pan American Silver Corp (PAAS.TO), failed.
Upon completion of the Centamin transaction, AngloGold shareholders are expected to own approximately 83.6% of the enlarged issued share capital of AngloGold Ashanti, and Centamin shareholders will own approximately 16.4%.
AngloGold Ashanti said it expects the deal to be accretive to free cash flow per share in the first full year following completion.
AngloGold Ashanti chairman Jochen Tilk described the deal as “extremely attractive” and said it had “huge geological potential” which the company was well placed to develop.
Centamin’s main asset is the Sukari gold mine, which is Egypt’s largest gold mine and one of the largest gold producing mines in the world.
The addition of Sukari’s annual output of 450,000 ounces will take AngloGold’s annual output to more than 3 million ounces, making it the world’s fourth-largest producer behind Newmont Corp, Barrick Gold Corp (ABX.TO) (AEM.TO) and Agnico Eagle..
The acquisition of Centamin also expands AngloGold’s portfolio into another major gold producing region. The company currently has assets in nine countries, including Tanzania, the Democratic Republic of Congo, Ghana, Guinea, Australia, the United States, Brazil, Argentina and Colombia.
Centamin’s board of directors said it intends to unanimously recommend the deal to shareholders.
($1 = 0.7634 British pounds)
(1 USD = 1.3567 Canadian Dollars)
