Gaining control of Sukari would boost AngloGold’s annual production by 450,000oz. Credit: istara from Pixabay.

AngloGold Ashanti has offered $2.5bn (R44.85bn) to take over smaller rival Centamin, which owns Egypt’s largest gold mine, Sukari.

As per the proposal, shareholders of London Stock Exchange and Toronto Stock Exchange-listed Centamin would get 0.06983 new AngloGold shares along with $0.125 in cash for each share they hold.

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The offer values Centamin shares at 163p each, a 36.7% premium over the closing price on 9 September 2024 and a 37.6% premium to the 30-day volume-weighted average price.

Should the acquisition proceed, AngloGold shareholders would own around 83.6% of the combined business, with Centamin shareholders holding the remaining 16.4%.

The Sukari mine, operational since 2009, has produced more than 5.9moz of gold. It is ranked among the world’s top-producing mines.      

In the first two months of the third quarter of 2024 alone, the mine reported production of 93,278oz and sales of 102,563oz at an average realised gold price of $2,420/oz.

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Gaining control of this mine would boost AngloGold’s annual gold production by 450,000oz, taking its overall output to 3.1moz and positioning it as the world’s fourth-largest gold producer in terms of volume.

AngloGold believes the acquisition to be a “compelling strategic fit” and expects it to increase free cash flow per share and net asset value per share in the first full year following completion.

Centamin’s directors, advised by Merrill Lynch International (BofA Securities) and BMO Capital Markets, have deemed the offer fair and reasonable. They have unanimously recommended that Centamin shareholders to approve the transaction.

AngloGold CEO Alberto Calderon said: “We will build on the good work by the Centamin team to realise the significant upside in Centamin. We look forward to welcoming Centamin’s employees and shareholders to our group in the coming months.”

If materialised, this deal would result in Centamin becoming the latest mining group to exit the London stock market, following the departures of Randgold upon its acquisition by Barrick Gold. Withdrawal of Russian gold miners amid the Ukraine war also has also left a void in the London market.