AngloGold Expands Nevada Footprint

Cash deal may explain miner’s sale of G2 stake

AngloGold Ashanti (NYSE: AU) has agreed to acquire Vancouver-based developer Augusta Gold Corp (TSX: G) in a friendly, all-cash deal.

AngloGold will pay C$1.70 per share, a 28% premium to Augusta’s Tuesday closing price in Toronto, valuing the company at C$152 million on a fully diluted basis.

AngloGold will also provide Augusta with funds to repay certain loans, which stood at US$32.6 million at the end of March.

The deal will expand AngloGold’s footprint in the Beatty District of Nevada, where the company holds the 14.3 million ounce North Bullfrog and Arthur projects, which were previously known as the Expanded Silicon project.

Augusta holds the shovel-ready Reward project, and the larger Bullfrog project, which hosts resources of 1.46Moz of gold and 3.38Moz of silver.

Both are adjacent to AngloGold’s ground.

A September 2024 feasibility study on a proposed small-scale open pit heap leach operation at Reward returned a post-tax net present value (5% discount rate) of US$163.5 million, internal rate of return of 41.1% and payback period of 1.9 years, based on a gold price of US$2600 an ounce.

Reward is fully permitted and Augusta said it was likely to be the first modern producer in the district.

The company planned to use the cash generated by the 39,000oz per year operation to fund the larger Bullfrog development.

However, it also had a strategic process underway given the proximity of AngloGold’s ground to its projects, noting AngloGold’s US$370 million acquisition of Corvus Gold and US$150 million acquisition of Coeur Mining’s (NYSE: CDE) Beatty district properties in 2022.

“This acquisition reinforces the value we see in one of North America’s most prolific gold districts,” AngloGold CEO Alberto Calderon said.

“We believe that securing these properties will not only solidify our leading position in the most important new gold district in the US but will also improve our ability to develop the region under an integrated plan – with more flexibility, greater access, better infrastructure sharing, and cohesive engagement with all stakeholders.”

AngloGold is aiming to get its North Bullfrog project, the first of its Nevada projects to be developed, permitted by the end of next year.

The US$476 million development is expected to produce an average of 105,000ozpa in its first five years and an average of 76,000ozpa over its 11-year mine life at all-in sustaining costs of US$934/oz.

Using a long-term gold price of US$2200/oz, the IRR is estimated at 29%.

Share sale mystery solved?

Last week, AngloGold offloaded its entire stake in Guyana explorer G2 Goldfields (TSX: GTWO)

The company sold its 35.9 million shares at C$2.75 per share for proceeds of C$98.8 million to two large European investors.

AngloGold first invested in G2 in January last year by paying C$22 million for 24.5 million shares at C90c per share and increased its stake in July 2024 by acquiring another 8.9 million shares at C$1.45 per share as part of G2’s C$42 million equity raising.

“The ability to place the Anglo shares in such short notice and with such high-quality and very supportive investors is a testament to the quality of our team and assets,” G2 executive chairman Patrick Sheridan said.

“We will continue to expand the considerable gold resource at G2, focusing on our New Oko discovery as well as our regional portfolio of gold exploration properties.”

In light of the New Oko discovery, G2 has paused the planned spin-out of some of its ground to G3 Goldfields and is reviewing its portfolio.

On Tuesday, G2 reported the best results to date from the discovery, including 60m at 5.9 grams per tonne gold, including 22.5m at 9.3g/t gold; 99.9m at 2.2g/t gold, including 25.5m at 5.5g/t gold; and 51m at 3g/t gold, including 10.5m at 6.3g/t gold.

The stock jumped more than 8% yesterday off the back of the results.

The discovery sits 10km to the north of its 3.1Moz Oko-Ghanie deposit.

G2 is planning to release an updated resource and preliminary economic assessment on the greater Oko project by the end of the year.