ABN - Harmony Gold has entered an agreement to buy AngloGold Ashanti’s Moab Khotsong gold mine in South Africa for US$300 million.
The South African miner said the acquisition will add value to the company and strengthen its position as a cash-generative gold mining company.
Harmony added in a statement that the mine will boost cash flow by more than 60% and grow its underground resources base in South Africa by 38%.
“The Transaction benefits all our stakeholders. It creates value for our shareholders, preserves jobs and sustains the surrounding mining communities with the potential to significantly extend the life of mine of the Moab Khotsong operations,” said Harmony CEO Peter Steenkamp.
“We believe the South African gold mining environment creates opportunities which Harmony has chosen to capitalise on.”
The rationale behind the purchase is based on improving Harmony’s near-term production, adding low-cost annual gold production and increasing cash flow and earnings.
While the company also expects stakeholders to benefit from in country value creation, investment and development opportunities in the South African gold mining sector and delivering on Harmony’s Black Economic Empowerment (BEE) commitment.