Anglogold acquires 100%Anglogold acquires 100% of "highly profitable" Cripple Creek discovered by Jeff Pontius, president of Inmternational Tower Hill
- In 2006, Cripple Creek produced 283000oz of gold, at a cost of $248/oz.
- Total resources: 7.3 million ounces.
>>AngloGold acquires 100% of ‘highly profitable’ CC&V gold JV
AngloGold-Ashanti acquires a 100% stake in Colorado’s Cripple Creek gold mine as the South African mega-gold miner consolidates its assets.
https://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=44381&sn=Detail
Author: Tessa Kruger
Posted: Monday , 14 Jan 2008
JOHANNESBURG -
Major gold producer AngloGold Ashanti's (JSE:ANG) acquisition of the Cripple Creek & Victor Gold Mining Company in Colorado is a continuation of its strategy to consolidate gold assets to take charge of its strategic direction.
The company announced Monday that it has agreed to acquire 100% of Golden Cycle Gold Corporation (GCGC) through a merger transaction of approximately $149 million. The primary investment of the company listed on the NYSE's ARCA Exchange is a 44% stake in the Cripple Creek & Victor Gold Mine. AngloGold holds a majority stake of about 56% in the mine.
Spokesperson Himesh Persotam told Mineweb the Cripple Creek and Victor mine was a relative small player among the company's international assets, but a "very efficient, economical and highly profitable one".
The mine had a total proved and probable reserve base of 129 million tons of ore at a grade of 0.93 per ton or 3.8 million ounces of reserves. Resources stood at 290m tons at a grade of 0.79 grams per ton or 7.3 million ounces.
Cripple Creek produced about 300 000 ounces of gold annually of AngloGold-Ashanti's total annual production of 5.6 million ounces. It was the company's only gold mine in North America.
"To put it into context, the mine made a profit contribution of approximately $46m for the nine months ending September last year," Persotam said. "The biggest factor with this transaction was for us to consolidate our interest to drive the asset in the strategic direction we want it to go. There is an indirect opportunity to look at further growth in the region but our plan is to first consider what we can do with the mine."
He added that Ashanti would conduct further brownfields exploration at Cripple Creek.
The consolidation in North America followed AngloGold Ashanti's consolidation of Iduapriem in Ghana at the end of September last year by acquiring a 15% minority stake.
Persotam said the North-American asset differed from the company's South African mines in the sense that it was an open pit, highly mechanised operation not fully exposed to high labour costs but exposed to oil prices.
In terms of the transaction, each share of GCGC's common stock will convert into the right to receive AngloGold-Ashanti American Depositary Shares (ADSs) on the basis of an exchange ratio of 29 AngloGold Ashanti ADS per 100 shares of GCGC's common stock.
Based upon the closing price of AngloGold-Ashanti ADSs as traded on the NYSE on Friday of US$49.59, this represents an offer price of US$14.38 per share of the Company`s common stock. This price represents a premium of 29.1% over the volume-weighted average price of the GCGC`s common stock during the thirty-day period up to Friday, 11 January and a premium of 37% over Friday's closing price.<<