SOURCE: AngloGold Ashanti

AngloGold Ashanti

February 17, 2009 16:44 ET

AngloGold Ashanti to Sell the Tau Lekoa Mine, as Well as the Adjacent Goedgenoeg and Weltevreden Project Areas, to Simmer and Jack Mines Limited

JOHANNESBURG, SOUTH AFRICA--(Marketwire - February 17, 2009) - AngloGold Ashanti Limited (NYSE: AU) ("AngloGold Ashanti" or "the Company") is pleased to announce that it has agreed to sell with effect from 1 January 2010 (or after), the Tau Lekoa mine together with the adjacent Weltevreden and Goedgenoeg project areas (the "Transaction") to Simmer and Jack Mines Limited ("Simmers") for an aggregate consideration of:

a.    R600 million less an offset up to a maximum of R150 million for
      unhedged free cash flow generated by the Tau Lekoa mine in the
      period between 1 January 2009 and 31 December 2009 as well as an
      offset for unhedged free cashflow generated by the Tau Lekoa mine in
      the period between 1 January 2010 and the Effective Date of the
      Transaction (the "Completion Consideration"). Simmers shall endeavor
      to settle the Completion Consideration entirely in cash, however
      Simmers may issue to AngloGold Ashanti ordinary shares in Simmers
      ("Shares") up to a maximum value of R150 million (the "Share Value")
      with the remainder payable in cash; and

b.    a royalty ("Royalty"), determined at 3% of the net revenue (being
      gross revenue less state royalties) generated by the Tau Lekoa mine
      and any operations as developed at Weltevreden and Goedgenoeg (the
      "Sale Assets"). The Royalty will be payable quarterly for each
      quarter commencing from 1 January 2010 until the total production
      from the Sale Assets upon which the Royalty is paid is equal to 1.5
      million ounces and provided that the average quarterly rand price of
      gold is equal to or exceeds R180,000/kg (in 1 January 2010 terms)

The Effective Date will occur on the later of 1 January 2010 or the first day in the calendar month following the fulfillment of all conditions precedent to the Transaction. AngloGold Ashanti will continue to operate Tau Lekoa until the Effective Date with appropriate joint management arrangements with Simmers and will retain all operating cash flow generated from the Tau Lekoa mine for the year ending 31 December 2009 greater than R150 million as determined on an unhedged basis. In addition, following the Effective Date, Simmers will treat all ores produced from the Sales Assets at its own processing facilities. As a result AngloGold Ashanti will have increased processing capacity available, allowing for the processing of additional material sooner from its other Vaal River mines and surface sources, thereby further accelerating cash flow.

The Transaction is consistent with AngloGold Ashanti's strategy of active portfolio management to focus human and financial resources on core operations. Tau Lekoa is one of the smallest of AngloGold Ashanti's South African operations and is both geographically and geologically separated from the Company's other Vaal River mines (the Ventersdorp Contact Reef as mined at Tau Lekoa is generally of a lower gold grade and also does not contain uranium in meaningful quantities as compared to the Vaal Reef as mined at the Company's other Vaal River mines). AngloGold Ashanti therefore took a strategic decision, following its asset review process, to initiate a sale process for the Sale Assets subject to satisfaction of the Company's value parameters.

The Transaction is conditional upon the fulfillment of, amongst others, the following conditions precedent:

(1)   Simmers raising sufficient cash to settle the Completion
      Consideration subject to the Share Value;
(2)   the receipt of all Ministerial Consents and/or other Government
      agency approvals in South Africa, as required to transfer all rights,
      title and interests to the mining properties forming part of the Sale
(3)   if and to the extent required, the approval of the Transaction by
      Simmers shareholders; and
(4)   certain regulatory and other third party approvals, if and to the
      extent required, including the South African Reserve Bank, the JSE
      Limited and the South African Competition Commission.

Commenting on the Transaction, Mark Cutifani, CEO of AngloGold Ashanti, said, "I am delighted that we have been able to execute another important step to focus our asset portfolio. The Transaction will act to strengthen our balance sheet further and after an orderly transition process will enable us to focus our key human resources and financial resources across our strategic asset base and growth initiatives."

Financial Advisers                                           Legal Advisers
Rand Merchant Bank                                                  Tabacks

Certain statements made in this communication, including, without
limitation, those concerning the proposed sale of AngloGold Ashanti's
interests in the Tau Lekoa mine together with the adjacent Weltevreden and
Goedgenoeg project areas, the benefits anticipated from the proposed sale
and the timing of the satisfaction of the conditions precedent to the
transaction, the timing of the repayment of AngloGold Ashanti's bridge
financing and AngloGold Ashanti's strategy to reduce its gold hedging
position including the extent and effects of the reduction, contain certain
forward-looking statements regarding AngloGold Ashanti's operations,
economic performance and financial condition. Although AngloGold Ashanti
believes that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations will prove
to have been correct. Accordingly, results could differ materially from
those set out in the forward-looking statements as a result of
unanticipated delays or difficulties in obtaining regulatory or third party
approvals and other factors. For a discussion of such factors, that may
affect AngloGold Ashanti, including changes in economic and market
conditions, success of business and operating initiatives, changes in the
regulatory environment and other government actions, fluctuations in gold
prices and exchange rates, and business and operational risk management,
refer to AngloGold Ashanti's annual report for the year ended 31 December
2007, which was distributed to shareholders on 31 March 2008, and report to
shareholders for the quarter and nine months ended 30 September 2008, which
was distributed to shareholders on 30 October 2008. AngloGold Ashanti
undertakes no obligation to update publicly or release any revisions to
these forward-looking statements to reflect events or circumstances after
today's date or to reflect the occurrence of unanticipated events.  All
subsequent written or oral forward-looking statements attributable to
AngloGold Ashanti or any person acting on its behalf are qualified by the
cautionary statements herein.

AngloGold Ashanti posts information that is important to investors on the main page of its website at and under the "Investors" tab on the main page. This information is updated regularly. Investors should visit this website to obtain important information about AngloGold Ashanti.

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