South Africa's AngloGold Ashanti Ltd has agreed to buy the 50 percent of Brazil's Crixas gold mine it does not already own for $220 million cash from Kinross Gold Corp as part of its drive to expand in the Americas.
AngloGold Ashanti said on Tuesday it expected the deal to increase its annual attributable production from Brazil to over 500,000 ounces and the contribution from the Americas region as whole to more than 1 million ounces.
“This deal further simplifies our portfolio and gives us greater exposure to Brazil, where we've had significant success in growing our production as well as our reserve and resource base,” said AngloGold Ashanti chief executive Mark Cutifani.
“We see long-term, lower risk, potential from Serra Grande (Crixas), which is a key component of our strategy to grow the contribution from the Americas.”
AngloGold Ashanti said the deal would be funded by existing cash reserves and debt facilities.
The transaction is the latest in a series of disposals by Kinross as it looks to sell off non-core assets.
Last year, it sold an 8.5 percent equity interest in diamond miner Harry Winston for about C$100 million, while in 2010 it sold a 22.5 percent interest in the partnership holding Harry Winston's 40 percent interest in the Diavik Diamond Mines joint venture.
Kinross's share of Crixas's proven and probable gold reserves was about 375,000 ounces as of December 31, and its share of forecast production for 2012 was about 70,000 gold equivalent ounces.
Kinross said the deal was expected to be completed during the second quarter of 2012. - Reuters