Charlotte Mathews
15 January 2008
Johannesburg — GLOBAL gold producer AngloGold Ashanti was offering to buy Golden Cycle Corporation, its co-shareholder in the Cripple Creek & Victor Gold Mining Company in the US, for $149m in shares, the companies said yesterday.
The transaction would increase AngloGold's ownership to 100% of Cripple Creek, its only US operation, from 67% previously, although it had a 100% interest in the mine's production until the initial loan it made to the joint venture was repaid. At the end of September the outstanding value of the loan was $336m.
"Successful completion of this transaction will enable us to consolidate the full mineral endowment at CC&V over the remainder of the mine's life, while simplifying the ownership of this long-life North American asset," said AngloGold executive vice-president Richard Duffy.
AngloGold has acceptances from 44% of Golden Cycle shareholders to the deal, and needs a two-thirds vote in support. It is offering 29 of its American d epositary s hares, listed on the New York Stock Exchange (NYSE), for every 100 Golden Cycle shares held, a 29% premium to the 30-day volume weighted average price of Golden Cycle's shares on the NYSE Arca exchange, an online exchange for trading shares and options.
AngloGold and Golden Cycle entered into a joint venture over Cripple Creek in 1991. Golden Cycle provided the land and AngloGold the loan financing. In 2006, Cripple Creek produced 283000oz of gold, which was 5% of AngloGold's total production, at a cost of $248/oz.
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