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AngloGold Ashanti to Buy Centamin to Boost Production Capacity
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AngloGold Ashanti plc (AU - Free Report) announced that it has entered into an agreement to acquire Egyptian gold producer Centamin. The deal, valued at around £1.9 billion ($2.5 billion), will add a large-scale, long-life world-class Tier 1 asset (Sukari) to AngloGold Ashanti’s portfolio.
AngloGold Ashanti’s annual gold production was around 2.6 million ounces in fiscal 2023. With the addition of Sukari, the annual gold production will reach 3 million ounces. It will also lead to lower combined unit total cash costs and all-in-sustaining costs.
AU to Maximize Value From Sukari
Centamin’s flagship asset is the Sukari gold mine located in the promising Arabian Nubian Shield. It is Egypt’s first large-scale modern mine. Sukari began production in 2009, with commercial production starting in 2010. It has produced more than 5.9 million ounces of gold since 2009.
It will be a strategic fit within AngloGold Ashanti’s existing portfolio of world-class assets and projects. AU’s expertise in operating similar mines, such as Geita in Tanzania, will help in maximizing the value from the Sukari mine. With this addition, the proportion of gold production from its Tier 1 assets will move up from 62% to 67%.
Apart from Sukari, Centamin is advancing an active pipeline of growth prospects. This includes the Doropo project in Côte d’Ivoire (development project), EDX Blocks in Egypt (which is in early-stage exploration) and the ABC Project in Côte d’Ivoire, which is a greenfield project.
Centamin projects average gold production from Sukari to be around 506 thousand ounces during the 2024-2032 period. Total average production is envisioned to be more than 700 thousand ounces during the 2027-2032 period, including contribution from Doropo.
The transaction will be accretive to AngloGold Ashanti’s cash flow per share in the first year of completion. By leveraging its existing capabilities and expertise, asset optimization program and global scale, the company expects to deliver additional upside and optimization opportunities.
Financial Terms of the AngloGold Ashanti-Centamin Deal
Per the agreed terms, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares and 12.50 cents in cash in exchange for each share. Eligible Centamin shareholders will also receive an interim dividend of 2.25 cents for each share held . This is scheduled to be paid on Sep. 27, 2024.
The completion of the deal remains subject to the satisfaction of conditions, including approvals of Centamin shareholders and the Egyptian Competition Authority.
On completion, AngloGold Ashanti shareholders will own approximately 83.6% stake in the combined company and Centamin shareholders will own 16.4%.
AU Stock’s Price Performance
Shares of the company have gained 22.6% in the past year compared with the industry’s 15.1% growth.
Image Source: Zacks Investment Research
AngloGold’s Zacks Rank & Other Stocks to Consider
AngloGold currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares gained 155.9% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares gained 137% in a year.
The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO’s shares gained 103% in a year.
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AngloGold Ashanti to Buy Centamin to Boost Production Capacity
AngloGold Ashanti plc (AU - Free Report) announced that it has entered into an agreement to acquire Egyptian gold producer Centamin. The deal, valued at around £1.9 billion ($2.5 billion), will add a large-scale, long-life world-class Tier 1 asset (Sukari) to AngloGold Ashanti’s portfolio.
AngloGold Ashanti’s annual gold production was around 2.6 million ounces in fiscal 2023. With the addition of Sukari, the annual gold production will reach 3 million ounces. It will also lead to lower combined unit total cash costs and all-in-sustaining costs.
AU to Maximize Value From Sukari
Centamin’s flagship asset is the Sukari gold mine located in the promising Arabian Nubian Shield. It is Egypt’s first large-scale modern mine. Sukari began production in 2009, with commercial production starting in 2010. It has produced more than 5.9 million ounces of gold since 2009.
It will be a strategic fit within AngloGold Ashanti’s existing portfolio of world-class assets and projects. AU’s expertise in operating similar mines, such as Geita in Tanzania, will help in maximizing the value from the Sukari mine. With this addition, the proportion of gold production from its Tier 1 assets will move up from 62% to 67%.
Apart from Sukari, Centamin is advancing an active pipeline of growth prospects. This includes the Doropo project in Côte d’Ivoire (development project), EDX Blocks in Egypt (which is in early-stage exploration) and the ABC Project in Côte d’Ivoire, which is a greenfield project.
Centamin projects average gold production from Sukari to be around 506 thousand ounces during the 2024-2032 period. Total average production is envisioned to be more than 700 thousand ounces during the 2027-2032 period, including contribution from Doropo.
The transaction will be accretive to AngloGold Ashanti’s cash flow per share in the first year of completion. By leveraging its existing capabilities and expertise, asset optimization program and global scale, the company expects to deliver additional upside and optimization opportunities.
Financial Terms of the AngloGold Ashanti-Centamin Deal
Per the agreed terms, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares and 12.50 cents in cash in exchange for each share. Eligible Centamin shareholders will also receive an interim dividend of 2.25 cents for each share held . This is scheduled to be paid on Sep. 27, 2024.
The completion of the deal remains subject to the satisfaction of conditions, including approvals of Centamin shareholders and the Egyptian Competition Authority.
On completion, AngloGold Ashanti shareholders will own approximately 83.6% stake in the combined company and Centamin shareholders will own 16.4%.
AU Stock’s Price Performance
Shares of the company have gained 22.6% in the past year compared with the industry’s 15.1% growth.
Image Source: Zacks Investment Research
AngloGold’s Zacks Rank & Other Stocks to Consider
AngloGold currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , IAMGOLD Corporation (IAG - Free Report) and Eldorado Gold Corporation (EGO - Free Report) . Each of these companies sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares gained 155.9% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares gained 137% in a year.
The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO’s shares gained 103% in a year.