BOBBY GODSELL
I will deal first with the announcement we made last night about the Ashanti
transaction. To see this announcement in its proper context it is important to
distinguish between the role of the Government of Ghana in this transaction.
Firstly as a substantial shareholder, and secondly as a regulator. Turning to
its role as a substantial shareholder; we were of course pleased that during
the course of this week, firstly the board of Ashanti confirmed its earlier
recommendation of our offer and that the Government of Ghana in its
shareholder capacity equally indicated its support for the Ashanti board
recommendation. The Government has also undertaken to vote in favour of
our merger proposal and against any competing proposals during the term of
the agreement between ourselves and the Government and for a period of six
months, but in any event not later than 31st
July 2004. This is a substantial
months, but in any event not later than 31
st
July 2004. This is a substantial
step towards the completion of the merger, which will produce a very large,
widely diverse, global gold company with a long-life suite of high margin
assets and a compelling list of growth projects.
I would now like to turn to the Government's role as a regulator.
The key reason for the merger, in our view, has always been the expeditious
and optimal development of the Obuasi Deep project. This process will begin
immediately the deal closes with an intensive $44 million drilling program to
confirm the extent and grade of mineralisation at depth followed by the
development of mine access to these ore bodies. The entire project will take
the best part of a decade and will involve investment of the order of
magnitude of three quarters of a billion dollars. To make an investment over
this period of time possible, we indicated in our original offer that we needed a
degree of fiscal certainty. In the process of negotiating a stability agreement
to achieve this with the Government of Ghana it became possible to agree
terms for the agreement which added real value to this project in our hands.
We have agreed to mullitise this additional value creation for the government
up front and we are very pleased that the government has elected to take
their share of the value in our shares; consistent with its statement that it
intends to be a long term shareholder in this company. Therefore, AngloGold