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Gold miner Centamin (LSE:CEY), known for its Sukari gold mine in Egypt, announced on Tuesday that it has agreed to be acquired by AngloGold Ashanti in a £1.9 billion deal.
Under the terms of the agreement, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares and $0.125 in cash per share. This offer represents a premium of approximately 36.7% over Centamin’s closing share price on Monday.
Centamin’s Chief Executive, Martin Horgan, remarked on the significance of the Sukari mine, stating, “Centamin’s stewardship of the Sukari mine from its discovery through development and into ongoing operation since 2009 highlights the world-class mining potential of Egypt. The completion of the reinvestment phase and consistent operational performance reinforce Sukari's status as a top-tier, low-cost, and large-scale gold producer. Sukari is strategically positioned within the emerging Arabian Nubian Shield.”
Horgan also emphasized that the acquisition will allow Centamin’s assets to benefit from AngloGold Ashanti’s extensive, diversified portfolio. He noted that AngloGold Ashanti has a strong track record in responsibly developing and operating large-scale mines in Africa in partnership with host governments and communities.
At 0905 BST, Centamin’s shares rose by 25%, reaching 149.04p.
Russ Mould, Investment Director at AJ Bell (LSE:AJB), commented on the significance of the takeover, stating, “The acquisition of Centamin marks the end of an era for mid and large-cap gold miners on the UK stock market. Centamin stands as one of the last pure-play gold producers listed on the London Stock Exchange. While many smaller exploration companies remain, few have achieved Centamin’s level of success in developing a large-scale operational mine.”
Mould noted that over the years, gold producers of notable scale have either been acquired by rivals or merged, leaving investors with fewer options on the London Stock Exchange. He highlighted that Centamin’s Sukari mine is a highly coveted asset, often sought after but rarely found. AngloGold Ashanti’s acquisition aims to continue the mine’s production for potentially another decade.
The takeover comes at a pivotal moment for the gold mining sector. Many gold mining stocks have underperformed relative to rising gold prices due to cost inflation compressing profit margins. However, as inflationary pressures ease, margins are expected to improve. This may encourage further acquisitions in the sector, suggesting that Centamin’s acquisition could be one of several in the coming months.
