AngloGold Ashanti has indicated that it is continuing to sharpen focus on its operating assets and high-return development projects and agreed to sell its entire 50% indirect interest in the Gramalote Project to B2 Gold Corp for a total consideration of up to $60 million.
The agreement, which provides full ownership of the project to B2Gold, follows a joint sales process by partners AngloGold Ashanti and B2Gold for their combined interests in Gramalote that failed to yield an offer from a third party that was acceptable to either AngloGold Ashanti or B2Gold. B2Gold is the manager of the project.
AngloGold Ashanti CEO Alberto Calderon, while, commenting on the Gramalote Project said “This sale will help increase our focus on our operating assets the projects we intend to develop”.
“AngloGold Ashanti remains a committed, long-term investor in Colombia with our exciting Quebradona copper and gold project and we look forward to playing a key role in developing of a modern, responsible mining sector in the country.”Alberto Calderon
AngloGold Ashanti will receive a cash payment of $20 million at the closing date of the proposed transaction, with the balance dependent on project construction and production milestones that the Gramalote Project reaches.
The proposed transaction, subject to limited conditions including approval of the South African Reserve Bank, as the agreement has been executed prior to the implementation of AngloGold Ashanti’s proposed corporate restructuring related to its new corporate domicile in the United Kingdom and primary listing on the New York Stock Exchange, is expected to close by the end of the year.
The first highlight of the transaction is to consolidate the Gramalote Project under one owner, providing additional optionality to analyze lower capital intensity, higher-return development opportunities for the Project.
Historically, the Gramalote Project has been advanced under a joint venture between B2Gold and AngloGold, which has led to analyzing the project on a larger scale basis to provide meaningful production growth to both companies. Under a single owner, different development opportunities will be assessed with the goal of delineating a project that maximizes the return for B2Gold as sole owner of the Gramalote Project.
Accretive to B2Gold shareholders on a total gold resource per share basis is an important highpoint of the transaction. With the Transaction, B2Gold will add 2.11 million gold ounces of Indicated Mineral Resources and 0.74 million gold ounces of Inferred Mineral Resources to the Company’s consolidated Mineral Resource base.
Moreover, B2Gold’s in-house projects team to commence work on various smaller scale project development plans, with the goal of identifying a higher-return project than the previously contemplated joint venture development plan. Based on the results of the 2022 Gramalote feasibility study, the contemplated larger scale project did not meet the combined investment return thresholds for development by both B2Gold and AngloGold.
B2Gold plans to commence a detailed review of the Gramalote Project, including the facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller scale project.
The results of the review will allow the Company to determine the optimal parameters and assumptions for a formal study, to commence in the fourth quarter of 2023, with the goal of completing an initial assessment by the end of the second quarter of 2024.