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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 LONDON 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"
INSTANT REPLAY CAN BE ACCESSED 1 HOUR AFTER THE CALL FOR 1 WEEK:
EUROPEAN/SOUTH AFRICAN DIAL IN NUMBER, +44 181 288 4459, ACCESS CODE: 623 462
UK TOLL DIAL IN NUMBER, 0181 288 4459, ACCESS CODE: 623 462
UK TOLL FREE DIAL IN NUMBER, 0500 637 880, ACCESS CODE: 623 462
USA TOLL DIAL IN NUMBER, +1 303 804 1855,ACCESS CODE: 699 271
USA TOLL FREE DIAL IN NUMBER, +1 800 625 5288, ACCESS CODE: 699 271
JMD/CCD/AGO139.00
5 APRIL 2000
JOINT ANNOUNCEMENT BY ANGLOGOLD AND ASHANTI
ASHANTI TO SELL A 50% INTEREST IN GEITA TO ANGLOGOLD
ASHANTI GOLDFIELDS COMPANY LIMITED ("ASHANTI") AND ANGLOGOLD LIMITED
("ANGLOGOLD") ARE PLEASED TO ANNOUNCE THAT THEY HAVE SIGNED A NON-BINDING HEADS
OF AGREEMENT 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 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 (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 AND NEITHER SIDE HAVING A CASTING VOTE. 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 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 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 5.5 MILLION
OUNCES PER ANNUM PRODUCED FROM DEEP, NARROW VEIN ORE BODIES IN SOUTH AFRICA.
HOWEVER, AN ADDITIONAL 2.1 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 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 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 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 MEDIA
STEVE LENAHAN JAMES DUNCAN
+2711 637 6248 (TEL) +2711 637 6147 (TEL)
+2711 637 6107 (FAX) +2711 637 6399 (FAX)
SLENAHAN@ANGLOGOLD.COM +27 82 892 8052 (MOBILE)
JDUNCAN@ANGLOGOLD.COM
IN THE UK IN THE USA
ALEX BUCK CHARLES CARTER
+44 20 7849 5630 (TEL) 800 417 9255 TOLL FREE
+44 20 7849 6137 (FAX) +1 212 750 7999 (TEL)
+44 7932 740 452 (MOBILE) +1 212 750 5626 (FAX)
ABUCK@ANGLOGOLD.COM CCARTER@ANGLOGOLD.COM
IN AUSTRALIA
ANDREA MAXEY
+61 3 9684 4920 (TEL)
+61 3 9684 4951 FAX)
+61 411 231 393
AMAXEY@ANGLOGOLD.COM
WWW.ANGLOGOLD.COM
QUERIES : ASHANTI
JAMES ANAMAN
MANAGING DIRECTOR - PUBLIC AFFAIRS
(233) 21 778 178
JANAMAN@ASHANTI.NET
KWEKU AWOTWI
MANAGING DIRECTOR - STRATEGIC PLANNING AND NEW BUSINESS
(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
ALLAN JORDAN (GOLIN-HARRIS)
(1) 212 309 0613
AJORDAN@GOLINHARRIS.COM
4C COMMUNICATIONS
CARINA CORBETT
(44) 20 8949 7171
4C4U@UKGATEWAY.NET
NOTES TO EDITORS
THE GEITA PROJECT
GEITA, IN NORTHERN TANZANIA, JUST SOUTH OF LAKE VICTORIA, IS NINE MILES FROM
ANGLOGOLD'S NYAMULILIMA HILL PROJECT. COMBINING GEITA AND NYAMULILIMA HILL IS
SEEN BY BOTH COMPANIES AS CREATING SYNERGIES, WITH REAL VALUE FOR THE
SHAREHOLDERS OF BOTH THROUGH A SINGLE, JOINT MANAGEMENT STRUCTURE AND THE USE
OF A SINGLE TREATMENT PLANT.
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 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 GEITA JOINT VENTURE WILL BE OWNED 50% BY ASHANTI, 50% BY ANGLOGOLD.
* IN CONSIDERATION FOR THE ACQUISITION OF THIS 50% INTEREST IN THE GEITA
PROJECT, ANGLOGOLD WILL, ON COMPLETION OF THE TRANSACTION, PAY ASHANTI US$205
MILLION IN CASH.
* ANGLOGOLD WILL UNDERTAKE TO PROVIDE OR PROCURE THE PROVISION OF US$130
MILLION OF PROJECT FINANCING (THE "PROJECT FINANCING") TO THE GEITA PROJECT
UPON COMPLETION. THE PROJECT FINANCE WILL BE REPAID FROM THE CASH FLOWS OF
GEITA.
* THE RESULT WILL BE THAT ASHANTI WILL HAVE AVAILABLE US$335 MILLION, BEFORE
TAXES AND EXPENSES. THIS CASH WILL, INTER ALIA, BE APPLIED BY ASHANTI IN
REPAYING THE US$100 MILLION BRIDGE LOAN AND OTHER INDEBTEDNESS, INCLUDING
INTER-COMPANY LOANS. ANGLOGOLD WILL ACQUIRE 50% OF THE BALANCE OF OUTSTANDING
INTER-COMPANY LOANS.
* PROJECT CASHFLOWS WILL FIRST BE APPLIED TO SERVICING PROJECT DEBT AND THEN BE
SPLIT EQUALLY BETWEEN THE PARTIES.
* MANAGEMENT OF THE GEITA JOINT VENTURE WILL VEST IN A JOINT VENTURE COMMITTEE,
COMPRISING AN EQUAL NUMBER OF REPRESENTATIVES FROM ASHANTI AND ANGLOGOLD. THE
CHAIRMAN OF THE JOINT VENTURE COMMITTEE WILL ROTATE BETWEEN AN APPOINTEE OF
ASHANTI AND OF ANGLOGOLD ON AN ANNUAL BASIS; THE FIRST SUCH CHAIRMANSHIP WILL
BE JOINT.
* THE JOINT VENTURE COMMITTEE WILL APPOINT AN EXECUTIVE MANAGEMENT TEAM WHICH
WILL INCLUDE A CHIEF EXECUTIVE AND WHICH WILL BE RESPONSIBLE FOR DAY TO DAY
MANAGEMENT OF THE GEITA PROJECT.
* ASHANTI AND ANGLOGOLD SHALL EACH HAVE PRE-EMPTIVE RIGHTS OVER THE OTHER'S
INTEREST IN THE JOINT VENTURE. THESE PRE-EMPTION RIGHTS WILL NOT, HOWEVER,
APPLY IN THE EVENT OF A CHANGE OF CONTROL OF EITHER ASHANTI OR 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 LONDON STOCK EXCHANGE, THE NEW YORK STOCK EXCHANGE,
THE AUSTRALIAN STOCK EXCHANGE, THE TORONTO STOCK EXCHANGE AND THE ZIMBABWE
STOCK EXCHANGE.
ANGLOGOLD
ANGLOGOLD IS THE WORLD'S LARGEST GOLD PRODUCER, WITH ANNUAL PRODUCTION OF SOME
7.6 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), LONDON (ANO LN), NEW YORK (AU) AND AUSTRALIAN (AGG) 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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