[miningmx.com] – ANGLOGOLD Ashanti has bid $335m for control of
South African-based uranium and gold producer, First Uranium, in a deal that will lift
AngloGold’s gold output to up to 100,000 oz/year and take total uranium reserves in
its Vaal River complex to 154.4 million pounds (lbs).
First Uranium is owned by Toronto-listed First Uranium Corporation, in which
AngloGold already has a 19.8% stake. The asset in question is Mine Waste Solutions,
a troublesome, underperforming asset in the hands of First Uranium.
Long-term uranium production from the asset will increase to between 3 million
lbs to 4.5 million lbs from a current output of 1.38 million lbs, the company said.
“The transaction provides us with valuable gold and uranium production, offers
significant synergies, facilitates rehabilitation of this area and secures further and
long-term employment opportunities,’ said Mark Cutifani, CEO of AngloGold.
“This is an excellent add-on opportunity for our company located in a region where we
already have a prominent presence,’ Cutifani added. Shares in AngloGold were down
nearly 3% in the US closing at $41.24/share.
The deal, if approved, will be financed from debt and cash resources and does much
to rationalise the group’s uranium tailings treatment in the Vaal River region,
including rehabilitation of the area. Given AngloGold’s existing shares in the company,
the takeover offer was not a complete surprise.
Initially, AngloGold’s gold production will increase to between 75,000 to 80,000
oz/year as a result and add some 352 million tons in total resource. Of this, there is
some 2.8 million ounces of economic gold and 62.2 million lbs of uranium.
A quarter of gold production from First Uranium’s Mine Waste Solutions is sold to
Franco Nevada Corporation, the North American investment company, at a cost of
$400/oz in terms of an earlier financing arrangement. AngloGold said this contract
would remain, but would be capped at a ceiling of 312,500 oz. Thereafter, 100% of
production would be retained by AngloGold.
The offer requires two-thirds support of First Uranium shareholders, or 50.1% of total
shares in issue, which includes AngloGold’s shareholding in the company. Other
conditions include South African Reserve Bank and Competition Tribunal approvals.
