AngloGold Ashanti (AGG), which currently holds, through its subsidiaries, a 50% interest in the Serra Grande mine in Brazil, has agreed to acquire the remaining 50% stake in the mine from Kinross Gold Corporation for US$220 million in cash. The transaction will be funded from existing cash reserves and debt facilities and remains subject to various conditions, detailed below.
“This deal further simplifies our portfolio and gives us greater exposure to Brazil, where we’ve had significant success in growing our production as well as our reserve and resource base,” Mark Cutifani, AngloGold Ashanti’s Chief Executive Officer, said. “We see long-term, lower risk, potential from Serra Grande, which is a key component of our strategy to grow the contribution from the Americas.”
Under the terms of the transaction, AngloGold Ashanti’s wholly owned subsidiary, AngloGold Ashanti Brasil Mineração Ltda. will acquire Kinross’ 50% interest in Mineração Serra Grande S.A, the principal asset of which is the Serra Grande mine, from Newinco Comércio e Partcipações Ltd,
a subsidiary of Kinross which holds its 50% interest in MSG. Newinco has provided customary warranties and indemnities in respect of its 50% share of certain tax claims against MSG. Kinross has provided a parent guarantee in respect of the obligations of Newinco under the transaction agreements.