Investors and group in harmony over raising $200m for AngloGold buyout
Harmony was compelled to tap on investors’ shoulders to support the rights issue after the coronavirus (Covid-19) pandemic rattled local and global capital markets.
Investors voted in favour of the rights issue during an extraordinary general meeting earlier this month.
The group said proceeds from the capital raised would fund the Mponeng mine, the world’s deepest gold mine, and Mine Waste Solutions.
Commenting on the placement, chief executive Peter Steenkamp said it was a vote of confidence from the company’s investors.
“This successful placement is a validation of our investors’ support for Harmony’s stated strategy to safely grow quality ounces and increase margins, specifically through the acquisition of the Mponeng and Mine Waste Solutions assets,” said Steenkamp, adding the company had the experience to operate both Mponeng and Waste Mine Solutions.
“We intend replicating our success in South Africa with decades of acquiring, operating, and extending the life of mines, and extracting additional value from mining operations.”
Harmony sold more than 60 million ordinary shares at R57.50 - a 5.4 percent discount on Wednesday's closing price and 3.5percent lower than the 30-day volume-weighted average price.
The company, which operates the Kusasalethu mine near Carletonville and the Hidden Valley Mine in Papua New Guinea, said the shares represented around 11.1 percent of its issued ordinary share capital before the placing. Harmony previously said it believed the acquisitions were a natural progression after it acquired AngloGold Ashanti’s Moab Khotsong mine in 2018.
Mponeng and Mine Waste Solutions are expected to boost the company’ near-term production by adding about 350 000 ounces of gold production a year. They are also expected to increase the group’s reserves by 8.27 million ounces.
Harmony shares declined 2.73percent on the JSE yesterday to close at R59.11.