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AngloGold Ashanti signs definitive agreement to acquire Corvus

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Global Mining Review,

AngloGold Ashanti Ltd and Corvus Gold Inc. have entered into a definitive arrangement agreement pursuant to which AngloGold Ashanti has agreed to acquire the remaining 80.5% of common shares of Corvus not already owned by AngloGold Ashanti (the transaction) at a price of CAN$4.10 per common share (the offer price) in cash.

The total transaction cost to AngloGold Ashanti is estimated to be approximately US$370 million. The Transaction implies a total equity value for all Corvus common shares and outstanding options to acquire common shares of approximately CAN$570 million (approximately US$450 million).

The offer price represents a premium of approximately 26% to the closing price of Corvus common shares on the Toronto Stock Exchange (TSX) on 12 July 2021, the day prior to the announcement that AngloGold Ashanti submitted a non-binding proposal to Corvus, and a premium of approximately 59% to the closing price of Corvus common shares on the TSX on 5 May 2021, the day prior to the announcement of the loan agreement and exclusivity.

Transaction highlights

The combination of Corvus and AngloGold Ashanti’s Nevada assets further consolidates one of the largest new gold districts in Nevada (the Beatty District) and provides the opportunity for AngloGold Ashanti to establish, in the medium and longer term, a meaningful, low-cost production base in a premier mining jurisdiction. Consolidation of the Beatty District has the potential for significant synergies due to economies of scale and integrated infrastructure, including processing facilities at an attractive capital intensity. The combined Beatty District asset base allows for streamlined engagement with federal, state and local stakeholders to advance and achieve shared sustainability goals and other district benefits, such as opportunities to design projects incorporating renewable energy, as well as develop conservation and other local projects in conjunction with the Beatty community.

Alberto Calderon, AngloGold Ashanti’s CEO and Executive Director, said: “We are pleased to reach an agreement with Corvus that we believe is value enhancing for all stakeholders. This transaction delivers a compelling, district-wide consolidation in Nevada, which allows for the Beatty District to become a potential Tier 1 asset for AngloGold Ashanti. The inclusion of these assets in our portfolio will enable AngloGold Ashanti to have first production in North America in the next three to four years, further improving the overall geographic balance of our portfolio. Placing these assets under single ownership will allow for significantly reduced capital intensity to develop the district with a phased and modular approach, providing for a meaningful, low-cost production base in the medium and longer term.”

Jeffrey Pontius, Corvus’ President and CEO, added: “The proposed all-cash offer provides a compelling opportunity for Corvus shareholders to realise significant value and eliminates exposure to future capital requirements to fund construction of Corvus’ projects. AngloGold Ashanti has been a supportive shareholder of Corvus since its inception and has supported us in our capital raising needs along the way. AngloGold Ashanti’s long history of successful and responsible exploration, discovery, mine building and operating expertise will be a significant benefit to the region and all of its stakeholders.”

AngloGold Ashanti has a long track record of developing and operating gold assets in the US, including the Jerritt Canyon Gold mine in Nevada and the Cripple Creek & Victor mine in Colorado. AngloGold Ashanti has a North American regional office in Denver, Colorado, from where it manages its US business interests as well as its global generative exploration portfolio, including its exploration portfolio in the US.

AngloGold Ashanti holds several exploration assets (Silicon, Merlin, Transvaal and Rhyolite) in the Beatty District where it has been conducting exploration activities for four years and has drilled 70 688 m during that period. Current exploration results indicate the potential for significant oxide ore bodies at Silicon and Merlin, as well as additional sulfide potential at Silicon at depth. AngloGold Ashanti anticipates it will publish a mineral resource at Silicon for the year ending 31 December 2021. Exploration work is ongoing to delineate the ore bodies at both Silicon and Merlin in greater detail.

AngloGold Ashanti’s conceptual development plan for the district envisions North Bullfrog being developed first, with production in the next 3 – 4 years, followed by Silicon, Merlin (including Lynnda Strip) and Mother Lode. Targets will be considered with strict reference to AngloGold Ashanti’s capital allocation framework. Further details on AngloGold Ashanti’s integrated development plan for the Beatty District will be communicated during 2022.

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