AngloGold Ashanti, the world's No. 3 gold producer, said it plans to sell its Tau Lekoa mine in South Africa to smaller rival Simmer & Jack for 600 million rand plus royalties.
South Africa's AngloGold, Africa's top producer of the metal, has agreed to sell the mine for the cash amount, plus a royalty of 3 percent on sales, the company said late Tuesday.
AngloGold said Tau Lekoa is one of its smallest South African operations and is both geographically and geologically separated from the Company's other mines.
The mine also has generally lower gold grades and does not contain viable uranium quantities as compared to its other mines, the group said. The sale also includes the adjacent Weltevreden and Goedgenoeg project areas.
As part of its asset review process, AngloGold said it decided to sell the asset, and beef up its balance sheet.
The transaction will act to strengthen our balance sheet further and after an orderly transition process will enable us to focus our key human resources and financial resources across our strategic asset base and growth initiatives, Mark Cutifani, the chief executive officer of AngloGold said.
The sale is subject to Simmers raising the required cash, approvals by Simmers shareholders and competition authorities.
AngloGold has been disposing of assets to raise cash. Last month sold its one-third stake in the Boddington gold mine project in Australia for up to $1.1 billion to Newmont Mining Corp, which owned the rest of the stake in the project.
(Reporting by James Macharia)© Thomson Reuters 2009 All rights reserved