Ashanti confirms 50 per cent sale of Geita Mine to AngloGold
Aluworks records negative earnings
Ashanti confirms 50 per cent sale of Geita Mine to AngloGold
Accra,
{Greater Accra}07 April 2000.
Ashanti
Goldfields Company (AGC) and the British AngloGold Limited on Wednesday signed
a non-binding Agreement for the sale of 50 per cent of Ashanti shares in the
Geita project in Tanzania.
Under the
agreement, AngloGold would pay Ashanti 205 million dollars in cash for a 50 per
cent share of the project and would procure or provide project financing
totalling 130 million dollars.
A joint
statement issued in Accra by the Public Affairs Department of AGC said the two
companies would each be responsible for the repayment of 50 per cent of this
project financing from their respective shares of project cash flow.
It said the
transaction is subject to a number of conditions including final legal
documentation, South African Reserve Bank, Ashanti shareholders and creditors
approvals. The deal is to be completed in the next six months with definitive,
legally binding agreements that would be entered into in the next two months.
The
statement noted that project financing would be used to repay in full the
existing 100 million-dollar bridge loan arranged by Barclays Capital and the balance
used to reduce inter-company loans made to the project by Ashanti.
AngloGold
is the world's largest gold producer, with approximately 5.8 million ounces per
annum produced from deep, narrow vein ore in South Africa.
It also has
an additional 1.7 million ounces per annum now from shallow underground mines
and from open-pit operation similar to Geita.
AngloGold
would acquire 50 per cent of the balance of these inter-company loans, the
result of which would be that Ashanti would have available 335 million dollars
in cash to repay the bridge loan and other indebtedness.
The Geita
joint venture would be governed by a committee, which would have equal
representation from both partners, with equal voting rights.
"Apart
from the first chairmanship, which would be joint, the joint venture committee
will be chaired on a rotating basis by representatives of Ashanti and
AngloGold". The statement said Ashanti and AngloGold propose to explore
the feasibility of expanding the Geita Joint Venture plant capacity from four
million tonnes per annum to seven million tonnes per annum by 2004, adding that
if requested, AngloGold would fund Ashanti's share of expansion costs on terms
to be agreed.
Mr. Sam
Jonah, Chief Executive of AGC commenting on the deal, said the Geita Project
attracted offers from a number of the world's top gold producers. "In the
final analysis, AngloGold's offer not only represents the best value for
Ashanti shareholders, but is also sensitive to management and stakeholder
issues important to Ashanti.
"In
addition, the deal would enable us to repay a substantial portion of our
existing debt, reducing gearing and place Ashanti's finances on a much firmer
footing".
Mr. Jonah
said for Tanzania, attracting a third major gold mining company to invest in
the Lake Victoria gold belt illustrates the growing confidence the global
mining community has in doing business in Tanzania and prospects in the region.
"We
are confident that, with an African partner of AngloGold's reputation, we can
develop this asset to its maximum potential for the benefit of all Tanzanians
and shareholders of both partners," Mr. Jonah added.
Mr. Bobby
Godsell, AngloGold boss, said, "the deal represents a further important
step in the pattern of increased co-operation between gold producers
worldwide".
"AngloGold
and Ashanti are obvious partners in the African gold mining context".
Mr. Godsell
said its share in Geita output would represent a further significance step in
changing the mining risk profile of AngloGold.
GRi…/
Accra
{Greater Accra} 07 April 2000.
The VAT
Service warned on Tuesday that it is illegal to charge the new rate of 12.5 per
cent passed by Parliament last Friday.
In a
statement issued in Accra, the VAT Service said it has come to its notice that
some registered traders had started charging the new rate and pointed out that
the VAT Amendment Law does not take immediate effect.
It said as
soon as the new law, which increased the rate from 10 per cent to 12.5 per
cent, receives Presidential Assent and an effective date is determined, the
business community and the public would be duly informed.
It said in
determining the effective date for the new tax, the VAT Service and the
Ministry of Finance are aware of the need to allow all VAT registered persons,
especially, retailers of goods, a period to adjust their record-keeping systems
for a smooth transition.
"To
facilitate the computation of the tax at the new rate of 12.5 per cent, ready
recovers have been prepared by the VAT Service and will be distributed to all
VAT registered persons." The statement said VAT officers would be visiting
registered traders to provide any advise and technical assistance required in
preparation for implementation of the new rate. It asked all registered persons
who need further information or assistance to contact their local VAT offices.
GRi…/
Aluworks records negative earnings.
Accra,
{Greater Accra} 07 April 2000.
Aluworks
Limited (ALW) on Wednesday said its operations in 1999-recorded negative 40.5
per cent on earnings per share for a total issued shares of 13,892,637.
A
preliminary statement of audited result of the company released to the Ghana
Stock Exchange in Accra fixed earnings per share for 1999 at 490 cedis compared
with 822 cedis recorded in 1998. The company, however, managed to increase
dividend per share by 11.1 per cent from 360 cedis to 400 cedis.
This was
attributed to very good profits of previous years and current satisfactory cash
flow. Notwithstanding, operating profit before tax and after interest on
borrowings and depreciation amortisation declined by 27.9 per cent from 15.7
billion cedis to 11.3 billion cedis while actual operating profit after tax went
up by five per cent to 4.5 billion cedis from 4.3 billion cedis.
Turnover
went up by 12 per cent from 92.8 billion cedis to 104 billion cedis. In the
company's estimation, profitability declined during the year under review
because it faced increased cost of primary aluminum and other inputs.
This was
aggravated by the continuous depreciation of the cedi against the dollar. It
said Aluworks was unable to fully pass the increased cost on to customers in
what it termed "the sluggish market."
Despite the
setbacks, the company achieved 87 per cent utilisation of plant capacity and
sold 17,884 metric tons of aluminum sheet products.
Out of
this, 12,314 metric tons representing 69 per cent was sold on the local market
and 5,570 metric tons representing 31 per cent were exported to customers in
West Africa and the United States.
The total
export revenue amounted to 10.3 million dollars. The company said it would
intensify its export drive in order to minimise the pricing and margin risks
inherent in selling on the local market.
GRi…/