Wits Gold and Pan African to Acquire 100% of Evander Gold Mines Limited, and Renewal of Cautionary Announcement
Tuesday, Jan 31, 2012
Canada NewsWire -- January 30, 2012
Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Registration Number 2002/031365/06
JSE Code: WGR
TSX Code: WGR
CUSIP Number: S98297104
Wits Gold and Pan African Resources plc ("Pan African") (together the "Consortium"), form a 50:50 partnership to acquire 100% of gold producer, Evander Gold Mines Limited ("Evander") from Harmony Gold Mining Company Limited ("Harmony") for ZAR1.7 billion (approximately C$221 million) less any distributions made by Evander to Harmony prior to the Closing Date (defined in section 2.1.1 below headed 'The Acquisition Agreement')("Transaction Consideration")
Additional attributable gold resources and reserves for Wits Gold
Immediate first attributable production ounces for Wits Gold
First step in transition of Wits Gold from an exploration specialist to emerging mid-tier gold producer
Upside potential in the advanced Evander development projects that contain additional gold reserve and resource ounces
Evander is cash-flow positive
JOHANNESBURG, Jan. 30, 2012 /CNW/ -
Wits Gold is pleased to announce that it has today, Monday, 30 January 2012 ("Signature Date"), together with Pan African, entered into a Sale of Shares and Claims Agreement (the "Acquisition Agreement") with Harmony, to acquire 100% of Harmony's interest in Evander, for a total consideration of ZAR1.7 billion (approximately C$221 million) less any distributions made by Evander to Harmony prior to the Closing Date (defined in section 2.1.1 below headed 'The Acquisition Agreement'), hereinafter the "Transaction", and the Consortium and Harmony hereinafter collectively the "Parties".
The Evander operations are located in Mpumalanga, South Africa, and comprise the operating Evander 8 shaft, and several potential development projects namely Rolspruit, Poplar, Evander South, the Kinross metallurgical processing plant, and a tailings facility (Project Libra). The Evander 8 shaft currently has an expected life of mine of more than ten years. Evander has recently experienced a vast improvement in performance through the closure of unprofitable shafts, plants and additional investments in its infrastructure. More information on Evander is provided in section 3, headed 'Background to Evander'. For more information on the members of the Consortium, refer to the notes at the end of this announcement.
This Transaction is the first step in the transition of Wits Gold from an
exploration specialist to an emerging, mid-tier gold producer, with related
positive cash flows. Following the appointment of Philip Kotze as Chief
Executive Officer ("CEO") of Wits Gold in August 2011, the company immediately launched a three tier strategy which comprises the acquisition of producing assets, project development and exploration. The Transaction represents the first step into delivering on the acquisition strategy, while the shallow De Bron Merriespruit (DBM) Project is being fast tracked for development, and the remaining exploration projects are taken further up the value curve.
Wits Gold's CEO, Philip Kotze, commented: "This transaction allows Wits Gold to become a producer overnight, and the cash generated from this operation will be utilised to partly fund our growth projects. Forming a partnership with Pan African has enabled both companies to make an offer for a better quality operating asset with significant upside potential. We look forward to working together with our partners to provide the best value for all our shareholders".
You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The companies undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events except where required by applicable laws.
SOURCE Wits Gold