The boards of AngloGold Ashanti and Centamin have agreed the terms of a recommended acquisition of Centamin in a deal that values the company at $2.5 billion.
Centamin’s flagship 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 Moz of gold.
The announcement came on the same day Centamin announced a trading update for the two months ending August 31, 2024, which outlined production of 93,278 oz of gold at an all-in sustaining cost (AISC) of $1,290/oz sold. This production came from both open-pit and underground sources at Sukari.
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 £1.63 based on the closing price of $28.80 per AngloGold Ashanti share and a £:$ exchange rate of £1:$1.3080 on September 9, 2024. This represents a premium of approximately 36.7% to the Centamin closing price of £1.20 per Centamin share on September 9.
Immediately following completion, it is expected that AngloGold Ashanti shareholders will own approximately 83.6% and Centamin shareholders will own approximately 16.4% of AngloGold Ashanti’s enlarged issued share capital.
The addition of Sukari immediately increases AngloGold Ashanti’s annual gold production by circa-450,000 oz to over 3 Moz for the 12 months ended December 31, 2023, with an immediate reduction to combined unit total cash costs and AISC.
Alberto Calderon, CEO of AngloGold Ashanti, said: “We are delighted to be announcing today’s transaction, which will add a Tier 1 asset to our portfolio. The transaction is free cash flow accretive in the first full year of production and net asset value accretive from day one; it will also offer additional upsides as we leverage our corporate infrastructure and our core competencies in exploration, operations and asset optimisation. We will build on the good work by the Centamin team to realise the significant upside in Centamin.”
James Rutherford, the Chair of Centamin, added: “This transaction is an endorsement of Centamin’s achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian Government has taken important steps to attract foreign investment to develop the country’s significant geological potential.”
Should all approvals for the friendly acquisition go as planned, the transaction could become effective before the end of the year.