R45bn deal: AngloGold Ashanti bids for company owning Egypt's largest gold mine
Centamin is the owner of Sukari in Egypt, one of the world's largest producing mines.
Gold bars and shards. Image: 123rf.com
Stephen Grootes interviews David McKay, editor of Miningmx.
Anglogold Ashanti is ready to acquire Centamin, the miner that owns the largest gold mine in Egypt.
Its offer of just under R45 billion ($2.5 bn) has been approved by the boards of both companies, but still needs to be approved by shareholders.
Centamin's flagship Sukari mine in Egypt is also one of the biggest in the world.
This addition to its portfolio would increase AngloGold’s annual production by around 450,000 ounces, reports mining.com, bringing its total yearly output to 3.1 million ounces.
Centamin shareholders will receive almost 0.07 AngloGold shares for each share, and about R2.23 in cash per share.
The offer represents an almost 37% premium to Centamin's closing price on 9 September.
Stephen Grootes interviews Miningmx editor David McKay and asks if Centamin's value really justifies the premium.
It depends on where one thinks the gold price is going to go, is McKay's response.
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"The gold price has been at record levels this year so you could, being critical, say this is right at the top of the market. I th Anglogold Ashanti would counter by saying it's not entirely a cash deal."
They're offering shares, so they could be seen to be in lockstep with market value, and that sort of minimises the downside for them."
"I do think that gold resources of quality producing at this level of cost (Sukari) are quite rare. I think they got a decent deal because Centamin operates in Egypt so suffers from the same kind of 'reputational risk' that South Africa does."
David McKay, Editor - Miningmx
For more insights from McKay, listen to the interview audio at the top of the article