Modern Mining February 2020

Harmony buys AngloGold Ashanti’s last SA assets

(commencing 1 January 2021). Based on AngloGold’s current production forecast, the Mponeng Deferred Compensation has a value of approxi- mately US$100-million • US$20 per oz in relation to under- ground production sourced within the West Wits mineral rights below the current infrastructure if it is developed. The acquisition is subject to South African Competition Authority approval and Section 11 approval from the Minister of Mineral Resources. 

Harmony Gold Mining Company Limited has agreed to acquire AngloGold Ashanti’s South African business, thereby consolidating its posi- tion as South Africa’s primary gold producer. The acquisition, which will see Mponeng and Mine Waste Solutions incorporated into the Harmony portfolio, enhances Harmony’s near-term production by adding annual gold production of approximately 350 000 oz per annum, increasing Harmony’s South African reserves by 8,27 million oz (excluding Mponeng below infrastructure reserves) and improving Harmony’s portfolio mix between surface and underground operations. Harmony believes that the acquisition is a natural next step following the acquisition of Moab Khotsong in 2018. A natural strategic fit with its existing asset base, the acquisition of Mponeng and Mine Waste solutions represents a compelling opportunity to enhance its posi- tion as a robust cash-generative gold mining company. “Over the past two years, Harmony has added over 500 000 quality gold ounces per annum through the acquisition of Moab Khotsong and now Mponeng and Mine Waste Solutions. The acquisition has the potential to improve our overall recovered grade and increase our cash flow margins,” says Harmony CEO Peter Steenkamp. “Harmony has demonstrated its ability to increase the life of mines it operates in South Africa – sustaining the mine communities sur- rounding the mining operations, preserving jobs and further unlocking value for its share- holders through increased grades and stronger margins,” he adds. The acquisition, which is subject to certain conditions, includes: • The Mponeng mine and its associated assets and liabilities • The Tau Tona and Savuka mines and associ- ated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities • First Uranium, which owns Mine Waste Solutions and Chemwes, as well as associ- ated tailings assets and liabilities • CovalentWater Company, AngloGoldSecurity Services and Masakhisane Investments • Certain rock-dump reclamation, mine reha- bilitation and closure activities located in the Vaal River region and their associated assets and liabilities. The purchase price comprises three ele-

ments including a US$200-million cash payment, which will be settled utilising available banking facilities and avail- able cash resources, and two deferred considerations. The deferred components of the agreement are: • US$260 per oz payable on all underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and TauTona mines) in excess of 250 000 oz per annum for six years

February 2020  MODERN MINING  5