Minerals (Pty) Ltd. (Arm)
African Rainbow Minerals
Acquisition of Free State assets by Harmony and ARM well on track
Johannesburg, 7 January 2002 -The Freegold Joint Venture today announced
that the company was well on track for the completion of the acquisition of
the Free State assets from AngloGold.
On 21 November 2001 the Freegold JV announced that it had acquired the
assets from AngloGold for R2,2 billion, of which R1,8 billion will be
payable within 10 business days after the conditions precedent had been met.
The balance of R400 million will be payable on 1 January 2005.
"To date the JV, a 50/50 venture between African Rainbow Minerals (ARM) and
Harmony, have completed a high-level due diligence investigation of the
assets and more importantly concluded a formal joint venture and
shareholders' agreement.The JV also took operational control of the assets
on 1 January 2002," commented Patrice Motsepe, executive chairman of ARM.
The acquisition agreement was restructured to accommodate the receipt of a
ruling from the South African Revenue Services, which was to have been
obtained by 31 December 2001.
AngloGold has now agreed that if the ruling has not been obtained on or
before 31 January 2002, the Freegold JV will acquire these assets from
AngloGold as going concerns on the date that the last of the remaining
conditions precedent are met.
"The price payable for these assets would be increased by the amount equal
to any tax payable by AngloGold," comments Bernard Swanepoel, chief
executive of Harmony.
"Shareholders should however bear in mind that such increase in the
acquisition cost of these assets will result in the Freegold JV having an
unredeemed capital balance equivalent to a significant portion of the
aggregate purchase price, thereby reducing the tax payable."
Although this additional amount will be paid to AngloGold as and when they
become liable for payment, the JV company's cash flow should be enhanced in
the medium term as this unredeemed capital balance is reduced through lower
The Freegold JV expects to have the remaining conditions precedent to have
been met by no later than 30 April 2002
For further details contact:
Bernard Swanepoel on +27(0)83-303-9922
Issued by Harmony Gold Mining Company Limited
Tel +27 11 411 2036