A little-known private equity company QKR Corporation is buying a Namibia-based Navachab gold mine from gold major AngloGold Ashanti for a total cash consideration of $110 million.
Navachab, QKR’s first acquisition, is seen by the company’s president and former Johannesburg gold analyst Lloyd Pengilly as having significant potential.
It is another example of private equity showing a new interest in mining.
Navachab produces below 2% of AngloGold Ashanti’s total production and is being disposed of against the background of AngloGold wanting to concentrate its efforts on operations larger than Navachab.
The partly cash payment will be adjusted to take into account the AngloGold subsidiary’s net debt and working capital position on the transaction’s closing date.
In addition, AngloGold will receive deferred consideration in the form of a net smelter return, which will be paid quarterly for a period of seven years following the second anniversary of the closing date.
The net smelter return, reportedly a form of royalty payment, will be determined at 2% of ounces sold by Navachab during a relevant quarter, subject to an average gold price of $1 350/oz being achieved, and capped at 18 750 oz sold a quarter.
Tags: Private Equity, Private Equity Firm, Private Equity Group, Private Equity Company, Private Equity Fund, Private Equity Investment, Private Equity Investor, Fund of Fund, Private Equity Business, Private Equity Industry, PE, QKR Corporation, Namibia, Navachab, Gold Mine, Gold Major, AngloGold Ashanti, AngloGold, Johannesburg, Lloyd Pengilly.