NaCC approves AngloGold and Guinea Fowl merger
05 Jun 2014 14:10pm
WINDHOEK, 05 JUN (NAMPA) The Namibian Competition Commission (NaCC) has approved a merger between AngloGold Ashanti Namibia and Guinea Fowl Investments Twenty Six Limited.
Guinea Fowl is a wholly-owned subsidiary of a private mining investment group, the United Kingdom-based QKR Corporation which purchased the Navachab Gold Mine from AngloGold Ashanti.
The mine is located at Karibib in the Erongo Region.
NaCC Chief Executive Officer Mihe Gaomab II in a media statement issued last week noted that the commission investigated the proposed transaction in accordance with Section 47 (2) of the NaCC Act and considered all relevant information at its disposal on 28 May 2014.
The commission resolved to approve the proposed merger between AngloGold Ashanti Namibia and Guinea Fowl Investments Twenty Six Limited subject to one condition on employment. The condition is that there shall be no retrenchments of employees of the merged undertakings from the Navachab Gold Mine for a period of two years from the date of approval of the merger by the NaCC.
Gaomab II noted that retrenchments do not include voluntary separation or voluntary early retirement; retrenchments which are not merger specific; and retrenchments which are merger specific agreed with the commission in writing after the approval of the merger, in the event that the merged undertakings experience adverse economic circumstances which necessitate such retrenchments.
In order for the commission to properly monitor the above condition the merged undertakings are required to submit compliance reports at intervals as determined by the commission.
Navachab is an open-pit mine which began its operations in 1989 and has a processing plant that handles 120 000 metric tonnes a month. The mine produced 63 000 ounces of gold in 2013 and 74 000 ounces in 2012.
On 10 February 2014, AngloGold Ashanti announced that it signed a binding agreement to sell Navachab to a wholly-owned subsidiary of QKR Corporation Limited. The agreement provided for an upfront consideration based on an enterprise value of US dollars 110 million (about N.dollars 1 billion) which will be adjusted to take into account Navachabs net debt and working capital position on the closing date of the transaction. In addition, AngloGold Ashanti will receive deferred consideration in the form of a net smelter return (NSR). The NSR is to be paid quarterly for a period of seven years following the second anniversary of the closing date and will be determined at two per cent of ounces sold by Navachab during a relevant quarter subject to a minimum average gold price of US dollars 1 350 (about N.dollars 13 500) per ounce being achieved and capped at a maximum of 18 750 ounces sold per quarter.