(Adds details)
JOHANNESBURG, JAN 30 – Harmony Gold said on
Monday it would sell Evander Gold Mines for 1.7 billion rand
($219 million) to junior miners Pan African Resources
and Witwatersrand Consolidated Gold Resources Limited.
Evander, based in South Africa’s eastern Mpumalanga
province, is seen as having the potential to produce 85,000 to
90,000 ounces of gold a year for at least a decade.
For Pan African the deal should boost gold output to 140,000
ounces a year from 95,000 ounces. For Wits Gold, it is the first
foray into production from exploration.
The transaction is part of Harmony’s strategy to reduce its
dependence on its South African base as it focuses attention on
developing mines elsewhere, including Papua New Guinea.
“We have taken the strategy to diversify,” Harmony Chief
Executive Graham Briggs said.
But he said the group had no plans to sell off any other
significant South African assets.
“Selling more South African assets is not on our radar,
unless it’s odds and ends and maybe mineral rights,” he told
Reuters in a telephone interview.
Harmony is South Africa’s third-largest gold miner and
depends on the country for 90 percent of its production, a far
higher percentage than bigger rivals AngloGold Ashanti
and Gold Fields, which have global footprints.
Gold miners are keen to move beyond South Africa in the face
of rising labour and power costs and the growing depths of its
mines – already the world’s deepest and among its most
dangerous.
The Pan African/Wits Gold consortium will settle the
transaction through a combination of debt, equity and
operational cash flows.
($1 = 7.7754 South African rand)
(Reporting by Ed Stoddard; Editing by Ed Cropley)
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