Mining major AngloGold augments Nevada portfolio with Augusta Gold purchase

The close proximity of their projects and a high gold price inspired the C$152M buy

Rowan Dunne

Published

8 hours ago

AngloGold Ashanti PLC (NYSE: AU) (FRA: HT3) is capitalizing on the high price of precious metals by expanding its mining footprint in Nevada’s Beatty District.

On Wednesday, the international major announced that it has entered a definitive agreement to purchase Augusta Gold Corp (TSE: G) (OTCMKTS: AUGG) (FRA: 7RZ) in a cash deal valued at C$152 million.

The purchase price of C$1.70 per share represents a 28 per cent premium on the stock’s closing price at the end of the day on Jul. 15. Additionally, AngloGold will be providing C$44.7 million to Augusta for the repayment of loans, as mentioned in a news release.

Through the acquisition, expected to close by the end of the year, AngloGold will expand its area of operations in the state significantly by obtaining two new projects in close proximity to Nevada assets it already holds.

Augusta’s Reward project holds 370 kilo ounces of proven and probable gold reserves while Bullfrog is estimated to contain 1,209 kilo ounces of measured and indicated yellow metal. Bullfrog also boasts a 2,666.6 kilo ounce measured and indicated silver resource. The price of silver just surged to a 14-year high at approximately US$37.96 per ounce.

The two operations are a considerable addition to the 14.3 million ounces of gold contained in four deposits at AngloGold’s North Bullfrog and Arthur projects.

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

Meanwhile, Augusta Gold Chairman Richard Warke says the sale will enable shareholders to benefit immediately instead of having to wait for Reward to start producing gold mid-way through 2027. Raising capital necessary to get the project to that stage otherwise would result in significant dilution, he pointed out.

In a note this month, JPMorgan Chase & Co (NYSE: JPM) selected AngloGold Ashanti as its top investment pick among mining companies operating in Europe, the Middle East and Africa. A large section of the major’s portfolio is situated in Ghana and Egypt, particularly. Nevada only represents a small portion of the company’s footprint.

Recent momentum in the gold sector has brought an increased rate of enthusiasm for Nevada mining companies like AngloGold and NevGold Corp (CVE: NAU) (OTCMKTS: NAUFF) (FRA: 5E50). Over the past year, the metal’s price has risen by more than 36 per cent and is sitting pretty at approximately US$3,341 per ounce.