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Introduction
Shareholders are informed that Harmony Gold Mining Company Limited (“Harmony”) has signed a sale of shares and claims agreement (“the Agreement”) with Pan African Resources plc (“Pan African Resources”) and Witwatersrand Consolidated Gold Resources Limited (“Wits Gold”) (the “Consortium”) for the disposal of Harmony’s entire interest in Evander Gold Mines Limited (“Evander”). The disposal will be for an aggregate purchase consideration of R1.7 billion, excluding the proceeds of the Taung Gold Transaction (as defined below), payable as set out below (the “Transaction”).
Evander
Evander is a wholly-owned subsidiary of Harmony. The Evander operations comprise the Evander 8 shaft which is located in Mpumalanga. Evander also includes several potential development projects namely Rolspruit, Poplar, Evander South and Libra. Evander 8 shaft currently has an expected life of mine of more than 10 years. Evander has an estimated resource of 34.4 million ounces of gold of which approximately 8 million ounces are in reserve.
The consortium
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Pan African Resources
Pan African Resources is a precious metals producer with a dual primary listing on the Main Board of JSE Limited (“JSE”), and the Alternative Investment Market of the London Stock Exchange, and operates in South Africa and Mozambique.
Wits Gold
Wits Gold is a gold and uranium exploration company with assets located in the Witwatersrand Basin in South Africa. Wits Gold is primary listed on the Main Board of the JSE and secondary listed on the Toronto Stock Exchange, and operates an American Depository Receipt (ADR) programme through the Bank of New York Mellon.
Harmony currently holds a 12.69% shareholding in Wits Gold which was acquired pursuant to the purchase of an option from one of Harmony's wholly owned subsidiaries by Wits Gold.
Price consideration
The purchase consideration of R1.7 billion, less certain distributions made by Evander to Harmony between 1 April 2012 and the closing date of the Transaction (“Closing Date”) will be payable as follows:
R1.4 billion less certain distributions made by Evander to Harmony between 1 April 2012 and the Closing Date of the Transaction;
four cash payments of R25 million each, payable quarterly and commencing three months after the Closing Date, amounting to R100 million in the aggregate;
a further R100 million payable 19 months after the Closing Date, provided the average rand gold price exceeds R410,000 per kg over the preceding 12 months. This payment can be made in either cash or shares (or a combination of both) at the election of the Consortium and should the Consortium elect to make payment wholly or partially in shares, each of Pan African and Wits Gold will issue shares to Harmony in equal value proportions; and
R100 million payable 31 months after the Closing Date, provided the average rand gold price exceeds R450,000 per kg during the preceding 12 months. This payment can be made in either cash or shares (or a combination of both) at the election of the Consortium and should the Consortium elect to make payment wholly or partially in shares, each of Pan African and Wits Gold will issue shares to Harmony in equal value proportions.
Taung Gold transaction
