Wrap Text
ANG - Anglogold Ashanti Enters Definitive Joint Venture Agreement With Okimo
Regarding The AGK Project In The Democratic Republic Of Congo
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number: ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
ANGLOGOLD ASHANTI ENTERS DEFINITIVE JOINT VENTURE AGREEMENT WITH OKIMO REGARDING
THE AGK PROJECT IN THE DEMOCRATIC REPUBLIC OF CONGO
AngloGold Ashanti is pleased to announce that it has entered into a
definitive joint venture agreement (JVA) with l`Office des Mines d`Or de Kilo-
Moto (OKIMO) relating to the development of the Ashanti Goldfields Kilo (AGK)
project in the Democratic Republic of Congo (DRC) and the transfer of the
exploitation permits to AGK. The JVA and ancillary documentation has been
entered into in terms of the findings of the review of the Mining Convention by
the DRC Government which was completed in February 2009.
``This agreement allows us to move forward with an enormously prospective
exploration programme from which we expect to develop another world class gold
project," Chief Executive Officer Mark Cutifani said. "It also allows us the
opportunity to generate prosperity for local communities and the country as a
whole, which is a critical part of creating a sustainable operating model in
this region."
"By signing this agreement, the parties responded positively to the
requirements of the DRC Government in relation to the review of the AGK mining
convention", Willy Bafoa Lifeta, Administrator General Manager and Chief
Executive Officer of OKIMO, said. "This agreement also has the advantage to
allow OKIMO to regain its position as a mining operator in the ITURI district
(KILO sector) by having its own infrastructures and mineral deposits outside of
the AGK project area".
Under the JVA, AngloGold Ashanti and OKIMO agree to jointly develop the AGK
project through the joint company AGK, in which AGA holds an 86.22% interest and
OKIMO holds the remaining 13.78%. The JVA provides for the exploitation permits
to be transferred from OKIMO to AGK covering an area of approximately 6,000 km2
in the Ituri district in the northeastern DRC. This includes the Mongbwalu
project where a mineral resource of approximately 3 million ounces has been
identified by previous exploration work and where further exploration and
feasibility studies are currently taking place.
In addition, greenfields exploration programs are planned throughout the AGK
project area. Through these greenfields exploration activities, AGK has agreed
to return to OKIMO approximately 30% of the AGK project area over a period of
three years, at a rate of about 600km2 a year. AGK, however, may delay such
returns by up to a further two years to facilitate an element of flexibility in
the exploration programs.
It has been agreed that an area of approximately 121 km2 located around the
towns of Bambu and Nizi, where OKIMO`s existing operations and headquarters are
situated, will not initially be part of the AGK project. AngloGold Ashanti and
OKIMO have agreed that AngloGold Ashanti will have a right to explore this area
at its own cost subject to a program that will be discussed jointly with OKIMO.
Should AngloGold Ashanti identify deposits having an inferred mineral resource
of more than 1.5 million ounces, then the two parties will develop up to two
such deposits in terms of a separate joint venture agreement which both parties
have undertaken to negotiate expediently and in good faith. OKIMO has further
agreed that it will not be entitled to transfer all or any part of this area to
any third party until such a joint venture agreement (including provisions for
the transfer of the two deposits referred to above) has been agreed with
AngloGold Ashanti. Thereafter, any transfer of all or part of this area to any
third party will be subject to pre-emptive rights in favour of AngloGold
Ashanti.
Ancillary documentation entered into in terms of the JVA includes:
1. the protocol entered into between the Government of the DRC and
AngloGold Ashanti and OKIMO under which AngloGold Ashanti and OKIMO
have secured certain undertakings and commitments from the Government
of the DRC in respect of the AGK project, including security of tenure
as long as AGK is in compliance with DRC mining legislation and for
such time as eh AGK project is in commercial production, as well as
the existing DRC mining legislation and fiscal regime under which the
AGK project will operate;
2. the exploitation permit transfer deeds for the transfer of these from
OKIMO to AGK;
3. the termination agreement of the existing amodiation agreement. The
termination will be effective upon the transfer of the exploitation
permits;
4. the financing agreement between AngloGold Ashanti and AGK (no new
capital will be issued in AGK until the first AGK project is
constructed and mining commences. Consequently, AngloGold Ashanti will
finance AGK with interest bearing shareholder loans until then);
5. the financial and technical assistance agreement pursuant to which AGK
undertakes to provide technical and financial assistance, by way of
loans, to OKIMO for a total amount of up to US$5 million;
6. the technical services agreement pursuant to which AngloGold Ashanti
will provide technical and administrative services to AGK; and
7. the loan agreement between AGK and OKIMO aggregating all loans as
advanced and to be advanced from AGK to OKIMO including any loans
under the financial and technical assistance agreement and for other
payments as made by AGK on behalf of OKIMO under the JVA which are
agreed to be repayable by OKIMO to AGK.
Under the JVA and ancillary documentation a total amount of US$1.25m is
payable by AGK to the Government of DRC and approximately US$10.6m is payable by
AGK to, or on behalf of, OKIMO as compensation for the loss of rent and payment
of surfaces rights arrears. Of this amount, approximately US$4.33m is repayable
by OKIMO to AGK under the loan agreement between AGK and OKIMO.
ENDS
26 March 2010
Contacts
Tel: Mobile:
Alan Fine (Media) +27(0)116376383 +27(0)833250757
E-mail: fine@AngloGoldAshanti.com
Joanne Jones (Media) +27(0)116376813 +27(0)828960306
E-mail: jjones@AngloGoldAshanti.com
Sicelo Ntuli (Investors) +27(0)116376339 +27(0)716080991
E-mail: sntuli@anglogoldashanti.com
Stewart Bailey (Investors) +1 212 836 4303 +1 646 338 4337
E-mail: sbailey@anglogoldashanti.com
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effects of the reduction, the economic outlook
for the gold mining industry, expectations regarding gold prices, production,
cash costs and other operating results, growth prospects and outlook of
AngloGold Ashanti`s operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of AngloGold
Ashanti`s exploration and production projects, the completion of announced
mergers and acquisitions transactions, , AngloGold Ashanti`s liquidity and
capital resources, and expenditure and the outcome and consequences of any
pending litigation proceedings, contain certain forward-looking statements
regarding AngloGold Ashanti`s operations, economic performance and financial
condition. Although AngloGold Ashanti believes that the expectations reflected
in such forward-looking statements are reasonable, no assurance can be given
that such expectations will prove to have been correct. Accordingly, results
could differ materially from those set out in the forward-looking statements as
a result of, among other factors, changes in economic and market conditions,
success of business and operating initiatives, changes in the regulatory
environment and other government actions, fluctuations in gold prices and
exchange rates, and business and operational risk management. For a discussion
of such factors, refer to AngloGold Ashanti`s annual report for the year ended
31 December 2008, which was distributed to shareholders on 27 March 2009 and the
company`s annual report on Form 20-F, filed with the Securities and Exchange
Commission in the United States on May 5, 2009 as amended on May 6, 2009.
AngloGold Ashanti undertakes no obligation to update publicly or release any
revisions to these forward-looking statements to reflect events or circumstances
after today`s date or to reflect the occurrence of unanticipated events. All
subsequent written or oral forward-looking statements attributable to AngloGold
Ashanti or any person acting on its behalf are qualified by the cautionary
statements herein.
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab on
the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
Date: 26/03/2010 08:59:01 Supplied by www.sharenet.co.za
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