Anglogold-Ashanti Deal to Be Completed By April

ANGLOGOLDS's merger with Ghana's Ashanti Goldfields should be completed by April, ending the takeover process which began in May last year when AngloGold said it was in talks Ashanti.

Last week European Union competition authorities gave the 1,5bn takeover of Ashanti and AngloGold the go-ahead, and on Friday AngloGold, at its quarterly results presentation, said that Ghana's parliament was expected to approve the deal in the next two weeks.

Bobby Godsell, AngloGold's CEO, said the company was aiming to grow its total production to more than 7-million ounces of gold in two to three years.

At the moment US-based Newmont Mining, the world's biggest gold-mining company, produces about 7,2-million ounces a year.

AngloGold said it anticipated that its gold production would increase from 5,6-million ounces to 6,6-million ounces this year.

In order to win the backing of the government of Ghana and secure a steady rate of corporate tax and royalties as well as other concessions, AngloGold agreed to pay the government $5m and give it 2658-million shares in the new company.

The government agreed to hold royalties at 3% for 15 years and corporate tax will be fixed at 30% for the same length of time.

The merger of AngloGold and Ashanti will increase AngloGold's hedge positions to 40% of its gold production over five years.

This is above the ceiling of 30% of gold production over five years set by the AngloGold board, and the company said it plans to reduce its forward sales "as quickly as possible and as quickly as the market can accommodate".

The company reported net earnings in the in the three months to the end of December fell to R611m from R729m September quarter.