River region. In addition, MWC is critical to managing and rehabilitating the underground water of the
Klerksdorp, Orkney, Stilfontein and Hartbeesfontein (“
KOSH
”) basin over the long term.
4. OVERVIEW OF HARMONY
Harmony is an independent, South African-domiciled gold mining company, which currently owns producing
gold mines located in the West Witwatersrand region and the Free State province of South Africa, as well as
in Papua New Guinea. In addition to these mining activities, Harmony owns and manages significant extraction
and processing facilities at its operations where gold-bearing ore is treated and processed before it is refined.
Harmony is also the joint venture partner with Newcrest Mining Limited on the Wafi Golpu project in Papua
New Guinea. In the financial year to June 2017, Harmony Gold produced c.1.1 Moz of gold at an AISC of
USD1 182/oz.
5. KEY TERMS OF THE TRANSACTION
5.1 Transaction consideration and use of proceeds
Under the terms of the SPA, Harmony will acquire the Sale Interests from AngloGold Ashanti for US$300
million (the “
Transaction Consideration
”), which will be settled in cash upon the Transaction becoming
unconditional and closing (the “
Closing Date
”).
The Transaction was classified as a Category 2 transaction in
terms of the JSE Limited (“JSE”) Listings Requirements.
The Transaction Consideration received will be utilised by AngloGold Ashanti to further reduce debt and
strengthen the Company’s balance sheet. This will afford AngloGold Asha
nti greater strategic flexibility to fund
its growth initiatives including its development projects.
5.2 Transfer
of
liabilities
and
environmental
obligations
All of AngloGold Ashanti’s obligations and liabilities (including all employee and health and safety
obligations
other than any claim related to Occupational Lung Disease for the period prior to the Closing Date), as well as
all environmental obligations related to the Mining Sale Assets arising on, before or after the Closing Date will
be transferred to Harmony.
Upon acquiring the Sale Interests, all of AngloGold Ashanti’s obligations related to Nufcor and MWC, including
in the case of MWC, all of AngloGold Ashanti’s obligations with regards to the pumping and efficient
management of the underground water in the Vaal River region (the “
KOSH Water Directive
”) will be
transferred to Harmony.
5.3 Key conditions precedent and effective date
The Transaction is subject to a number of conditions precedent, including but not limited to the following:
· By no later than 15 January 2018, Harmony entering into agreements relating to its proposed BEE
transaction as detailed in the Harmony announcement;
· Harmony securing the approval of its shareholders for the Transaction and its proposed BEE transaction;
· All necessary con
sents being obtained from the Department of Mineral Resources of South Africa (“
DMR
”)
including section 11 and section 102 approvals under the Mineral and Petroleum Resources Development
Act for the transfer of the mining rights related to the Mining Sale Assets;
· Securing the approval of the South African Competition Authorities;
· Waiver by the financing providers of AngloGold Ashanti and Harmony, as required; and
· AngloGold Ashanti being released from the KOSH Water Directive issued in relation to the KOSH basin,
in terms of which AngloGold Ashanti is liable for the long-term management and rehabilitation of
underground water in the KOSH basin.