SOURCE: AngloGold Ashanti

April 28, 2005 02:20 ET

Revised Terms for AngloGold Ashanti Subscription in Trans-Siberian Gold

JOHANNESBURG, SOUTH AFRICA -- (MARKET WIRE) -- April 28, 2005 -- AngloGold Ashanti Limited (NYSE: AU) is pleased to report that agreement has been reached with Trans-Siberian Gold plc ("TSG") in relation to revised terms for the second share subscription envisaged in the agreement with AngloGold Ashanti dated June 30, 2004, and subsequently amended on December 22, 2004 and April 15, 2005.

A revised subscription price of £1.30 per share has been agreed, as compared to the original £1.494 per share, reflecting the increased capital cost of the Asacha mine development, which is nevertheless projected to provide an acceptable rate of return for TSG. The subscription is conditional on TSG shareholder approval. A notice calling an extraordinary general meeting for this purpose will be posted shortly together with a letter to shareholders on the status of the Asacha project.

The second subscription was originally conditional, inter alia, on TSG entering into a binding agreement to implement project financing for Asacha. However, in the December 2004 amendment this condition was removed. Instead, TSG and AngloGold Ashanti agreed that the second subscription would be conditional on revised implementation and financing plans for the Asacha project being unanimously approved by the TSG Board and any regulatory filings in the Russian Federation necessary for the revised implementation plan having been made. These conditions have now been waived or satisfied. The subscription will remain subject to the outstanding conditions, such as no material adverse change to the business of TSG having occurred. These conditions will remain in place until TSG shareholder approval for the transaction has been obtained.

AngloGold Ashanti currently has a 17.5% equity interest in TSG that will increase to 29.9% upon completion of the second subscription. The second subscription will involve the issue of 6,131,585 new ordinary shares to AngloGold Ashanti for a consideration of £7,971,060.50.

Assuming shareholder approval is obtained, the transaction will then be completed. Following the subscription, AngloGold Ashanti will continue to have all the rights contained in the original subscription agreement, including:

--  two appointees on TSG's Board;
--  rights of first refusal over the financing of the Veduga project;
--  pre-emptive rights to a 51% interest in TSG's new mining or
    exploration projects (subject to certain exceptions); and
--  anti-dilution rights in the event of further share issues by TSG.
Furthermore, the three-year technical consultancy agreement effective from July 2004 continues in force.

Richard Duffy, AngloGold Ashanti's Executive Officer responsible for Business Development and a non-executive director of TSG, comments: "This second subscription is a demonstration of AngloGold Ashanti's continuing commitment to TSG. We remain optimistic about both Asacha and Veduga and look forward to continuing our partnership on these and other projects going forward."

Contact Information

  • Contact:
    Steve Lenahan
    Executive Officer - Corporate Affairs
    011.27.11. 637. 6248