AngloGold Ashanti has agreed to acquire Centamin, the owner of the producing Sukari gold mine in Egypt, in a stock and cash deal valued at around $2.5bn.
According to the terms of the deal, shareholders of Centamin will receive 0.06983 new AngloGold Ashanti shares for each Centamin share they hold and $0.125 in cash.
Besides, eligible shareholders of Centamin will receive and retain the interim dividend of $0.0225 per Centamin share for the six-month period ended 30 June 2024. Centamin is listed on both the London Stock Exchange and the Toronto Stock Exchange.
The consideration represents a 36.7% premium to the closing price of 120p per Centamin share on 9 September 2024 and a premium of 37.6% to the 30-day volume-weighted average Centamin share price as of 9 September 2024.
Centamin’s principal asset is Sukari, which is said to be Egypt’s largest gold mine as well as one of the world’s largest producing mines. The low-cost, bulk-tonnage open pit and high-grade underground operation began production in 2009.
The Sukari mine has produced more than 5.9 million ounces of gold.
Through the addition of the Egyptian gold mine to its portfolio, AngloGold Ashanti aims to immediately increase the company’s annual gold production by approximately 450,000 ounces to over three million ounces.
The acquisition of Centamin is also in line with AngloGold Ashanti’s core competencies.
Besides, AngloGold Ashanti expects the deal to boost its free cash flow per share in the first full year after completion and increase its net asset value per share. This will provide attractive returns for both its and Centamin’s shareholders.
The company also aims to leverage its asset potential framework to optimise corporate infrastructure and increase supply efficiencies. Additionally, it plans to explore further opportunities in the Sukari underground zones and nearby EDX blocks.
AngloGold Ashanti CEO Alberto Calderon said: “The Transaction 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 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.”
For Centamin shareholders, the transaction offers upfront cash returns.
It will also provide them with the potential for gains from the sector’s growth by being part of a larger and more diversified combined group with a robust presence in capital markets and greater trading liquidity.
Centamin CEO Martin Horgan said: “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.”
Upon the closing of the proposed transaction, shareholders of AngloGold Ashanti will hold around 83.6% and Centamin shareholders will own nearly 16.4% of AngloGold Ashanti’s enlarged issued share capital.
To be implemented by way of a court-sanctioned scheme of arrangement between Centamin and the scheme shareholders under Article 125 of the Jersey Companies Law, the deal is subject to several conditions and regulatory approvals.
The scheme is anticipated to become effective during Q4 2024, contingent upon the satisfaction of all relevant conditions and terms.
In July this year, Centamin estimated that the Doropo gold project in Côte d’Ivoire would require a total construction capital expenditure (capex) of $373m, based on the findings of a definitive feasibility study (DFS).
