AngloGold Ashanti strikes $2.5 billion deal to buy Egyptian gold miner Centamin

By Louis Goss

AngloGold Ashanti on Tuesday said it had agreed to acquire Egypt's largest gold miner Centamin for $2.5 billion in a deal aimed at boosting the Denver, Colo.-based company's production at a time of soaring global gold prices.

AngloGold Ashanti's cash and shares offer would see the miner acquire the Egyptian company at a price of 169 pence per share, in what marks a 36.7% premium on Centamin's closing share price on Monday, prior to news of the offer.

Centamin (UK:CEY) (CA:CEE) shares, listed on the London Stock Exchange, increased 24% on Tuesday having previously gained 39% in the 12 months prior to news of AngloGold's offer. AngloGold Ashanti's (AU) (ZA:ANG) shares tumbled 9% in premarket trade, after surging 54% this year.

AngloGold Ashanti said acquiring Centamin would see it take control of the company Sukari Gold Mine in Egypt, in an acquisition that would boost its production by around 450,000 ounces per year, to a total of 3 million ounces per year, at all-in sustaining costs of $1,196 per ounce.

Gold prices (GC00) have increased sharply over the past two years following a sharp increase in the rate of inflation and a slump in the global economy that has seen investors worldwide pile into safe haven assets.

FTSE-250 miner Centamin, which was first established in Australia in 1970, first moved into Egypt in the 1990s before starting production in the country from its Sukari Gold Mine in 2009, in what saw it open Egypt's first modern gold mine.

In July, Centamin also outlined plans to push ahead with construction of its Doropo Gold Project in Côte d'Ivoire, after a feasibility study found the new mine would be able to profitably produce 200,000 ounces of gold per year at a cost of $1,000 per ounce.

AngloGold Ashanti was first formed in 1998 through the merger of London listed mining giant Anglo American's gold mining assets. In 2004, AngloGold merged with Ghanaian miner Ashanti Goldfields Corporation.

"This transaction is an endorsement of Centamin's achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian government has taken important steps to attract foreign investment to develop the country's significant geological potential," Centamin chair James Rutherford said in a statement.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-10-24 0439ET

Copyright (c) 2024 Dow Jones & Company, Inc.