Joint Announcement by AngloGold and Ashanti.Business Editors JOHANNESBURG, South Africa--(BUSINESS WIRE)--April 5, 2000 Conference/Conference Call You are invited to join Ashanti and AngloGold at a briefing in Johannesburg later today on the content of the attached joint announcement regarding Geita. Alternatively, you may wish to access the briefing by telephone. Details of the joint briefing and teleconference, are provided below.
16.00 (SA time) JOINT BRIEFING AND CONFERENCE
15:00 UK time, 10:00 US Eastern time,
07:00 US Western time
Johannesburg Country Club, linked by
conference call to participants in South
Africa, the United Kingdom and Europe,
United States and Canada. If you wish to
participate in the conference call, please
ring:
South Africa toll free 0800 99 11 03
United Kingdom toll free 0800 923 3018
Europe dial in +44 181 240 8248
United States toll dial in +1 303 267 1000
United States toll free +1 800 553 2379
Canada toll free +1 888 223 5103
Password "Geita"
JOINT ANNOUNCEMENT BY ANGLOGOLD AND ASHANTI ASHANTI TO SELL A 50% INTEREST IN GEITA TO ANGLOGOLD Ashanti Goldfields n. 1. A small slender woolly annual (Lasthenia chrysostoma) with very narrow opposite leaves and branches bearing solitary golden-yellow flower heads; it grows from Southwestern Oregon to Baja California and Arizona; - it is often cultivated. Company Limited ("Ashanti") and AngloGold Limited ("AngloGold") are pleased to announce that they have signed a non-binding Heads of Agreement Heads of Agreement A non-binding document outlining the main issues relevant to a tentative partnership agreement. Notes: It is the draft used by lawyers when drawing up the contract. It serves as a guideline for both parties before any documents are legalized. for the sale by Ashanti to AngloGold of an effective 50% joint venture interest in the Geita project in Tanzania. AngloGold will pay Ashanti US$205 million in cash for a 50% share of the project and will procure or provide project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. to the Geita project totalling US$130 million. Ashanti and AngloGold will each be responsible for repayment of 50% of this project financing from their respective shares of project cashflow. This project financing will be used to repay in full the existing US$100 million bridge loan arranged by Barclays Capital Barclays Capital is the investment banking division of Barclays plc. It is a primary dealer in U.S. Treasury securities and various European Government bonds. Barclays Capital is led by CEO Robert (Bob) Diamond, an American who had been vice-chairman of Credit Suisse First (the "Bridge Loan") and the balance will be used to reduce inter-company loans made to the project by Ashanti. AngloGold will acquire 50% of the balance of these inter-company loans. The result will be that Ashanti will have available US$335 million in cash which will be applied to repaying the Bridge Loan and other indebtedness. US$65 million of the cash, which amounts to half the project financing, will be repayable by Ashanti out of Geita cashflows. As at December 31, 1999, Ashanti had spent US$138 million on the development of the project, funded by inter-company loans of US$115 million and supplier finance of US$23 million. The parties intend to enter into a joint venture agreement which will govern the operation and management of the Geita mine (the "Geita Joint Venture"). The Geita Joint Venture will be governed by a committee (the "Joint Venture Committee") which will have equal representation from both partners, with equal voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. and neither side having a casting vote CASTING VOTE, legislation. The vote given by the president or speaker of a deliberate assembly; when the votes of the other members are equal on both sides, the casting vote then decides the question. Dane's Ab. h.t. CASTRATION, crim. law. The act of gelding. . Apart from the first chairmanship which will be joint, the Joint Venture Committee will be chaired on a rotating basis by representatives of Ashanti and AngloGold. Ashanti and AngloGold propose to explore the feasibility of expanding the Geita Joint Venture plant capacity from 4 million tonnes per annum Per annum Yearly. to 7 million tonnes per annum by 2004. If requested to do so, AngloGold will fund Ashanti's share of expansion costs on terms to be agreed. Commenting on the deal, Ashanti's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Sam Jonah said: "The Geita project attracted offers from a number of the world's top gold producers. In the final analysis, AngloGold's offer not only represents the best value for Ashanti shareholders, but is also sensitive to management and stakeholder issues important to Ashanti. In addition, the deal will enable us to repay a substantial portion of our existing debt, reduce gearing and place Ashanti's finances on a much firmer footing." AngloGold CEO Bobby Godsell said: "This deal represents a further important step in the pattern of increased co-operation between gold producers worldwide. This co-operation is vital, both to secure the future of producers in continuing tough market circumstances, and to enable them to create value for their shareholders. "AngloGold and Ashanti are obvious partners in an African gold mining context. AngloGold is the world's largest gold producer, with approximately 5.8 million ounces per annum produced from deep, narrow vein ore bodies in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. . However, an additional 1.7 million ounces per annum now come from shallow underground mines and from open-pit operations similar to Geita. Our share of Geita output will represent a further significant step in changing the mining risk profile of AngloGold." Ashanti and AngloGold also intend to form a joint venture (the "Associated Joint Venture") to which AngloGold will contribute its adjacent Nyamulilima Hill property (also known as "Ridge 8") and to which Ashanti expects to contribute its entitlement under its Spinifex spi·ni·fex n. Any of various clump-forming, perennial Australian grasses, chiefly of the genus Triodia, growing in arid regions and having awl-shaped, pointed leaves. Joint Venture. The Associated Joint Venture will be held equally by Ashanti and AngloGold and will be managed on the same basis as the Geita Joint Venture. The two companies also announced today that they have agreed to enter into a strategic alliance in Africa. Both see Geita as a first step in a broader African partnership, and have agreed to consider inviting the participation of each other in any future gold mining projects, in any part of the African continent, including their respective home countries. On Tanzania, Sam Jonah said: "Attracting a third major gold mining company to invest in the Lake Victoria gold belt illustrates the growing confidence the global mining community has in doing business in Tanzania, and the prospectivity of the region. We are confident that with an African partner of AngloGold's stature, we can develop this asset to its maximum potential for the benefit of all Tanzanians and the shareholders of both partners." The transaction is subject to a number of conditions, including final legal documentation, South African Reserve Bank The South African Reserve Bank is the central bank of South Africa. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920," as a direct result of the abnormal monetary and financial conditions which World War I had brought. approval, regulatory approvals and Ashanti shareholder and creditor approvals. It is planned to complete the transaction within the next six months. Definitive, legally binding agreements should be entered into within the next two months, at which stage a further announcement will be made. Certain of the statements made in this announcement are forward-looking in nature. By their nature, the forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. These factors include, but are not limited to, statements made elsewhere in this announcement. In addition, risk factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Ashanti and AngloGold can be found in their respective public SEC filings. Neither Ashanti nor AngloGold undertake any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Any statement should be evaluated in the light of these factors. Queries : AngloGold In South Africa In South Africa Investor Relations Investor relations The process by which the corporation communicates with its investors. Media Steve Lenahan James Duncan James or Jim Duncan is the name of:
jduncan@anglogold.com In the UK Alex Buck +44 20 7849 5630 (tel) +44 20 7849 6137 (fax) +44 7932 2740 452 (mobile) abuck@anglogold.com In the USA In Australia Charles Carter Charles Carter could refer to:
Andrea Maxey 800 417 9255 toll free +61 3 9684 4920 (tel) +1 212 750 7999 (tel) +61 3 9684 4951 fax) +1 212 750 5626 (fax) +61 411 231 393 ccarter@anglogold.com amaxey@anglogold.com www.anglogold.com Queries : Ashanti James Anaman Kweku Awotwi Managing Director - Public Affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. Managing Director - Strategic (233) 21 778 178 Planning and New Business janaman@ashanti.net (233) 24 317 635 awotwi@ashanti.net Ernest Abankroh Company Secretary (233) 21 774 977 ernestab@ashanti.net Shandwick Consultants John Goold (London) (44) 20 7329 0096 jgoold@shandwick.com Golin/Harris Allan Jordan (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ) (1) 212 697 9191 ajordan@golinharris.com 4C Communications Carina Carina (kərē`nə) [Lat.,=the keel], southern constellation, representing the keel of the ancient constellation Argo Navis, or Ship of the Argonauts. Carina contains Canopus, the second brightest star in the sky. Corbett (44) 20 8949 7171 4C4U C4U Computers for Uganda (Puget Sound-area high schools; Washington state) @ukgateway.net Notes to Editors The Geita Project Geita, in northern Tanzania, just south of Lake Victoria, is nine miles Nine Miles is a reggae "band" started by Yoshiaki Manabe (真鍋吉明) of The Pillows. The name Nine Miles comes from the name of the town in which Bob Marley grew up in Jamaica.
Construction of the Geita mine is nearing completion and commissioning is expected to be completed by the end of the second quarter of this year. Build-up to full production is anticipated to take place during the third quarter, with full production expected by the fourth quarter. Gold production (excluding the proposed expansion) is expected to average approximately 500 000 ounces per annum during the first five years of full production. Cash operating costs operating costs npl → gastos mpl operacionales for the corresponding period are expected to average below US$180 per ounce. Geita has reserves of 5.5 million ounces accessible by open pit and total resources, including inferred resources, of 12.0 million ounces. Nyamulilima Hill has a resource containing 2.1 million ounces. Cash operating costs at the combined operations are expected to benefit from the ability to schedule increased quantities of higher grade ore from Nyamulilima Hill during the early years of operation. The Geita Joint Venture The Geita project is proposed to be operated in accordance with a new joint venture agreement: - The Associated Joint Venture will be owned 50% by Ashanti, 50% by AngloGold. - AngloGold will contribute to the Associated Joint Venture 100% of its Nyamulilima Hill project, and Ashanti expects to contribute 100% of its entitlement under the Spinifex Joint Venture. - The Joint Venture will agree to process the ore from the Associated Joint Venture on a toll basis to be agreed between Ashanti and AngloGold. The Associated Joint Venture - The Associated Joint Venture will be owned 50% by Ashanti, 50% by AngloGold. - AngloGold will contribute to the Associated Joint Venture 100% of its Nyamulilima Hill project, and Ashanti expects to contribute 100% of its entitlement under the Spinifex Joint Venture. - The Joint Venture will agree to process the ore from the Associated Joint Venture on a toll basis to be agreed between Ashanti and AngloGold. The Strategic Alliance Ashanti and AngloGold have agreed to consider inviting the participation of each other in any future gold mining projects, in any part of the African continent, including their respective home countries. Ashanti Ashanti is an African-based international gold mining and exploration group with six producing mines in three African countries, Ghana, Guinea and Zimbabwe. The Geita project in Tanzania is expected to be commissioned by the end of the second quarter 2000, with full production being achieved by the fourth quarter 2000. Ashanti has exploration programmes at more than 25 sites in most of the significant gold belts across several African countries. The largest of Ashanti's operations, the 100-year-old Obuasi mine in Ghana, is among the top producing gold mines in the world. Ashanti is listed on the Ghana Stock Exchange The Ghana Stock Exchange (GSE) is the principal stock exchange of Ghana. The exchange was incorporated in July 1989 with trading commencing in 1990. It currently has around 30 listed companies and 2 corporate bonds. All types of securities can be listed. , the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. , the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , the Australian Stock Exchange Australian Stock Exchange (ASX) Australia's major securities market, formed when the six state stock exchanges (Adelaide, Brisbane, Hobart, Melbourne, Perth, and Sydney stock exchanges) were merged in 1987. , the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and the Zimbabwe Stock Exchange The Zimbabwe Stock Exchange, or ZSE, is a small but active stock exchange in Africa. It has been open to foreign investment since 1993. It has about a dozen members and over 65 listed securities. . AngloGold AngloGold is the world's largest gold producer, with annual production of some 7.5 million ounces from operations spanning four continents. Formed in June 1998 through a merger of the gold interests of Anglo American and its associated companies, South African-based AngloGold is listed on the Johannesburg (ANG ANG In currencies, this is the abbreviation for the NL Antillian Guilder. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ), London (ANO Noun 1. ANO - a Palestinian international terrorist organization that split from the PLO in 1974; has conducted terrorist attacks in 20 countries; "in the 1980s the Fatah-RC was considered the most dangerous and murderous Palestinian terror group" LN), New York (AU) and Australian (AGG AGG Aggregate AGG Allgemeines Gleichbehandlungsgesetz AGG African Gold Group, Inc. AGG Arnall Golden Gregory LLP (Atlanta, GA) AGG Aggravated AGG Asociación de Gerentes de Guatemala ) stock exchanges and the Brussels (ANG BB) and Paris (VA FP) bourses. Its market capitalisation as at 31 December 1999 was R33.8 billion (US$5.6 billion). Certain of the statements made in this announcement are forward-looking in nature. By their nature, the forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. These factors include, but are not limited to, statements made elsewhere in this announcement. In addition, risk factors relating to Ashanti and AngloGold can be found in their respective public SEC filings. Neither Ashanti nor AngloGold undertake any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Any statement should be evaluated in the light of these factors. |
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