- AngloGold Ashanti will gain control of Egypt’s Sukari mine as part of the deal
- Located in the Arabian Nubian Shield, Sukari employs around 4,450 people
AngloGold Ashanti has agreed to acquire FTSE 250 gold mining company Centamin for around $2.5billion (£1.9billion).
The deal sees Centamin shares valued at 163p, a 36.7 per cent premium to the group’s closing share price on 9 September.
Centamin investors will be entitled to receive $0.125 in cash and about 0.07 new AngloGold Ashanti shares for each Centamin share they hold.
Big deal: Located in the Arabian Nubian Shield, the Sukari mine employs approximately 4,450 people, of whom the overwhelming majority are Egyptian
Following the transaction, AngloGold Ashanti will gain control of Centamin’s Sukari mine in Egypt, which has delivered over 5.9 million ounces of gold since beginning production in 2009.
Located in the Arabian Nubian Shield, Sukari employs approximately 4,450 people, of whom the overwhelming majority are Egyptian, and achieved annual gold output of 450koz last year.
In a separate trading update, Centamin revealed it produced 93,278oz of gold and sold 102,563oz from Sukari in the two months ending August.
Its other assets include the ABC and Doropo projects in Cote D’Ivoire, as well as the Eastern Desert Exploration Project in Egypt.
AngloGold Ashanti’s shareholders will own around 83.6 per cent of the enlarged business once the takeover is completed, with Centamin investors holding the other 16.4 per cent.
Jochen Tilk, chair of AngloGold Ashanti, said the deal is ‘highly compelling…and offers enormous geological potential that we are very well placed to develop’.
He added: ‘The transaction offers attractive returns for our shareholders and is aligned with our approach of prudently allocating capital to optimise our portfolio.’
Centamin shares soared 24.7 per cent to 149p on Tuesday morning, taking their gains over the past year to about 71 per cent.
If Centamin investors approve the deal, it would make Endeavour Mining the final major primary gold producer standing on the UK stock market.
The gold sector has endured significant consolidation in recent years amid growing concerns about depleting gold reserves.
Newmont Corporation acquired Australia-based Newcrest Mining for £15.7billion in November 2023, while onetime FTSE 100 business Randgold Resources merged with Canada’s Barrick Gold in December 2018.
Russ Mould, investment director at AJ Bell, said Centamin’s proposed takeover ‘has come at an interesting time for the gold mining sector.’
He notes that shares in many gold producers have trailed rising gold prices due to increasing cost inflation squeezing profit margins, but these pressures have recently started easing.
‘Gold miners feeling more confident about the future might be more willing to make acquisitions, meaning that Centamin’s takeover may not be the only one we see in the sector over the next six months or so,’ he remarked.
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