ANGLOGOLD Ashanti has bid $370m for the shares it doesn’t already own in Corvus Gold, an exploration company with activities focused on the Nevada gold district in the US.
The gold producer said in a statement today that it had offered to buy outstanding Corvus Gold shares for C$4.00 per share representing a premium of 23% to the closing price prior to the submission of the proposal.
The offer is also a 20% premium to the last 10-day volume-weighted average price of Corvus shares on the Toronto Stock Exchange. AngloGold said it was discussing terms with the management of Corvus “in a friendly manner”.
“The proposal is fully aligned to our strategy of growing ore reserve, building low-cost production, and generating sustainable returns,” said Christine Ramon, interim CEO of AngloGold Ashanti in a statement.
AngloGold currently has a 19.5% stake in Corvus Gold which owns North Bullfrog, Mother Lode, and other exploration assets located in southern Nevada’s Beatty District. These prospects are near AngloGold Ashanti’s Silicon, Transvaal and Rhyolite prospects in that region.
“The combination of Corvus’ and AngloGold Ashanti’s Nevada assets further consolidates one of the largest new gold districts in Nevada and provides the opportunity for AngloGold Ashanti to establish, in the medium and longer-term, a meaningful, low-cost, long-life production base in a premier mining jurisdiction,” said AngloGold.
Among the operational synergies offered by the takeover of Corvus, it would also enable AngloGold to streamline regulatory processes with Nevada’s federal, state and local authorities and shareholders, the Johannesburg-headquartered company said.
In April, the company passed up its pre-emptive rights over a 30% stake in the Tropicana mine in Australia that came up for purchase last year. Today’s announcement indicates that in doing so the company was keeping its powder dry. The Tropicana stake was valued at just over A$900m ($672m).
Ramon said in February that AngloGold Ashanti intended to grow the company’s annual production to between 3.2 million ounces and 3.6 million oz by 2025. Production for 2020 totalled 3.05 million oz.
Production growth was intended to come from the ramp-up of its Obuasi mine in Ghana – currently suspended pending a safety review – and incremental improvements elsewhere in the portfolio. There were also plans to approve the development of greenfield gold prospects in Colombia which it holds in joint venture with B2Gold, a Toronto-listed gold miner.
Last year, the company added 6.1 million ounces of gold on a gross basis, further extending the life of its portfolio. At Obuasi in Ghana, it added 1.8 million oz in new reserves whilst at Geita in Tanzania, reserves were increased by 1.4 million oz. This more than replaced depletion from mining and extended the overall reserve life of AngloGold’s portfolio to 11 years.