Harmony Gold CEO Peter Steenkamp. Picture: FREDDY MAVUNDA Harmony Gold secured overwhelming support from its shareholders to raise $200m (about R3.3bn) via equity to pay the cash portion of its purchase of AngloGold Ashanti’s last operating assets in SA.
With approvals comfortably topping 97% for a range of resolutions at SA’s largest gold producer’s extraordinary general meeting on Thursday, Harmony is now waiting for just the approval from the government for the transfer of mineral rights from AngloGold, to complete the deal, CEO Peter Steenkamp said.
There was no communication from the department of mineral resources and energy that gave any indication of delays or requests for details, he said after the shareholder vote.
The reason for any delay could stem from the lockdown of the economy since March 27 and the gradual easing of those conditions since the start of June as the economy reopened, he said, adding the deal should be concluded by the end of June.
Harmony had planned to use debt and cash to fund the transaction but the onset of the global coronavirus pandemic made it imperative for the company to conserve its cash in uncertain times, Steenkamp said.
Harmony is buying the Mponeng gold mine — the world’s deepest at 4km below surface — near Carletonville, the Mine Waste Solutions tailings retreatment operation as well as two mothballed mines.
The sale marks the end of an era for SA’s gold mining industry as its long-time champion turns its focus purely to its international portfolio, where it sees better returns than those that could be achieved by running and investing in deep-level, labour-intensive mines in its historic homebase.
Harmony will pay $200m in cash and $260/oz of gold from Mponeng and other underground assets included in the transaction based on production above 250,000oz a year. These payments would be made for six years from the start of 2021 and are capped at $100m.
Harmony will pay a further $20/oz on gold output coming from any extensions of mining below existing infrastructure at the three mines included in the transaction, Mponeng, Savuka and TauTona.
Harmony could ramp up production from Mponeng, Steenkamp said, without giving details of how it would achieve this.
Harmony has a history of mining old areas left behind by other companies and it would do a full assessment of what opportunities like this were at Mponeng and the other two suspended mines.Mponeng has 8.5-million ounces of gold reserves in a planned […]