AngloGold Ashanti Acquires Centamin for $2.5 Billion

The US-based AngloGold Ashanti, a global gold mining company with a diverse, high-quality portfolio of operations, projects and exploration activities in nine countries, on Tuesday said that it was acquiring Centamin, a gold mining company focused on the Arabian-Nubian Shield, for $2.5 billion.

Centamin is an established gold producer, whose flagship Tier 1 asset is the Sukari gold mine (Sukari), which is Egypt’s largest and first modern gold mine located in west of Marsa Alam, 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.

Upon completion of the deal, AngloGold Ashanti will own approximately 83.6%, and Centamin will own approximately 16.4% 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 market profile and greater trading liquidity.

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 has 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 with an immediate reduction to combined unit total cash costs and AISC.

AngloGold 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 its 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.

Strengthens Balance Sheet

The predominantly equity-based nature of the transaction maintains AngloGold Ashanti’s balance sheet strength and, combined with the addition of Sukari, enhances its ability to fund growth and return cash to AngloGold Ashanti Shareholders under its robust capital allocation framework,” the company said.

Anglo Gold Chair Jochen Tilk said that today’s transaction was highly compelling and builds on the strong foundation they have built. It adds to their portfolio the pre-eminent gold producer in Egypt, and offers enormous geological potential that we are very well placed to develop.

“The transaction offers attractive returns for our shareholders and is aligned with our approach of prudently allocating capital to optimise our portfolio,” he added.

AngloGold’s CEO Alberto Calderon said that the acquisition will add a Tier 1 asset to their portfolio. It is free cash flow accretive in the first full year of production and NAV accretive from day one; it will also offer additional upsides as the company leverages its corporate infrastructure and core competencies in exploration, operations and asset optimisation.

Centamin Chair James Rutherford said that 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.

The Centamin Board believes that the strategic merits of the transaction are compelling and that the terms offer Centamin shareholders participation in the continued growth of his company’s operations under the stewardship of AngloGold Ashanti, he said.