Recommended acquisition of Centamin by Anglogold Ashanti
The Boards of AngloGold Ashanti and Centamin have announced that they have agreed the terms of a recommended acquisition of Centamin. Centamin is an established gold producer, whose flagship Tier 1 asset is the Sukari gold mine, which is Egypt’s largest and first modern gold mine, as well as one of the world’s largest producing mines. Since production began in 2009, Sukari has produced over 5.9 million ounces of gold.
Under the terms of the Transaction, Centamin Shareholders will be entitled to receive for each Centamin Share 0.06983 New AngloGold Ashanti Shares and $0.125 in cash.
The terms of the Transaction value each Centamin Share at 163 pence based on the Closing Price of US$28.80 per AngloGold Ashanti Share and a £:US$ exchange rate of £1:US$1.3080 on 9 September 2024 being the last Business Day before the date of this Announcement.
This represents a premium of approximately 36.7 per cent to the Closing Price of 120 pence per Centamin Share on 9 September 2024 and 37.6 per cent to the 30-day volume-weighted average Centamin share price as of 9 September 2024, based on the 30-day volume-weighted average share price of AngloGold Ashanti as at the same date. This date represents the last Business Day before this Announcement.
The Offer Value implies Centamin’s entire issued and to be issued share capital is valued at approximately £1.9 billion or US$2.5 billion.
Immediately following Completion, it is expected that AngloGold Ashanti Shareholders will own approximately 83.6 per cent., and Centamin Shareholders will own approximately 16.4 per cent., of AngloGold Ashanti’s enlarged issued share capital, with Centamin Shareholders benefiting from up-front cash returns, alongside upside exposure to the sector through ongoing participation in a larger and more diversified combined group with an enhanced capital markets profile and greater trading liquidity.
Background to and reasons for the Transaction
The acquisition of Centamin is a compelling strategic fit, closely aligned with AngloGold Ashanti’s core competencies. Sukari is a world-class Tier 1 asset with a long life, compelling cost profile (total cash costs of $970/oz and all-in sustaining costs (“AISC”) of $1,196/oz in the 12 months ended 31 December 2023) and attractive development potential.
The addition of Sukari immediately increases AngloGold Ashanti’s annual gold production by circa 450koz to over 3Moz for the 12 months ended 31 December 2023 (subsidiaries are reported on a consolidated basis whereas joint ventures are reported on an attributable basis), with an immediate reduction to combined unit total cash costs and AISC.
AngloGold Ashanti expects the Transaction to be accretive to free cash flow per share in the first full year post-Completion and accretive to its NAV per share, delivering attractive returns for AngloGold Ashanti Shareholders and Centamin Shareholders, with additional upside from leveraging its Full Asset Potential framework, corporate infrastructure optimisation, supply efficiencies and further upside from the Sukari underground zones and adjacent EDX blocks.
AngloGold Ashanti believes it would be a well-suited operator of the Centamin portfolio given its significant breadth of experience and long track record in Africa operating similar large-scale open pit and underground mines.
Commenting on this Announcement, Jochen Tilk, the Chair of AngloGold Ashanti, said: “Today’s Transaction adds to our portfolio the pre-eminent gold producer in Egypt, and offers enormous geological potential that we are very well placed to develop.”
Commenting on this Announcement, Martin Horgan, the Chief Executive Officer of Centamin, said: “Centamin stewardship of the Sukari mine from discovery through development and into continual operation since 2009 is a demonstration of the world-class mining potential of Egypt. Completion of the reinvestment phase alongside consistent operational delivery underlines the Tier 1 status of Sukari as a safe, low-cost and large-scale gold producer. Sukari is strategically well placed within the emerging Arabian Nubian Shield.
The Transaction will allow our assets to grow as part of AngloGold Ashanti’s larger, diversified portfolio, benefitting from AngloGold Ashanti’s track record of responsibly developing and operating large-scale open pit and underground mines in Africa in close partnership with the host governments and communities.”
