Wednesday, 20th July 2005 (3179 views)

Aflease has moved another step closer to its aim of increasing gold assets with the purchase of a mothball mine from AngloGold Ashanti.

The South African mining company have announced that they will be buying the Weltevreden mine through the issue of $11.17 million dollars worth of their shares to AngloGold.

At the moment this is considered a good price, since shares are currently trading above the transaction price.

Whilst this may not be a material deal for South Africa’s biggest gold-miner, a spokesperson for AngloGold has suggested that acquiring a stake in Aflease increases the company’s exposure to uranium.

Development of the Weltevreden mine began in 1990 but it was placed on a care-and-maintenance basis when the gold price fell.

According to the agreement, Aflease will buy those portions of Weltevreden that lie near the surface, leaving AngloGold Ashanti to mine the deeper levels.

The asset has an indicated gold resource of 3.194 million ounces grading at 4.75 grams per ton.

 

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