Gold and diamond giants strike out for continental shelf

Anglogold, De Beers in marine mining joint venture

Times Live, Zambia

5 October 2009

AngloGold Ashanti and the De Beers Group of Companies have formed a joint venture in order to look for, and ultimately mine, gold and other minerals and metals.

The joint venture's activities will be focussed on marine deposits located in, or adjacent to, the area between the high water mark and the edge of the continental shelf on a worldwide basis, the parties said.

This area of interest for the purpose of the joint venture is defined as the continental shelf, they added.

"De Beers, together with its wholly owned subsidiary De Beers Marine and other companies and associates within the De Beers Group of Companies, have, through their marine diamond exploration and mining activities, developed certain skills, expertise and proprietary technology in relation to the exploration and mining of marine deposits on the continental shelf.

"The establishment of this joint venture will allow AngloGold Ashanti to take first-mover advantage of the opportunity of partnering with a world leader in the field of marine exploration and mining with a view to target the exploration for, and mining of, the target minerals from mineral deposits located on the continental shelf.

"This complements AngloGold Ashanti's existing terrestrial exploration and mining activities and its mineral resource, ore reserve and production bases," the parties said in a statement.

AngloGold Ashanti will hold its offshore interests in the joint venture through its wholly owned offshore subsidiary, AngloGold Ashanti Marine Exploration Limited (AGAME) and its South African and Southern African Development Community interests in the joint venture either directly or via a South African nominee. De Beers will hold its interests in the joint venture via its wholly owned subsidiary, De Beers Group Exploration Holdings Limited (DBGEX).

AngloGold Ashanti and De Beers, through AGAME and DBGEX, will pursue their activities in the joint venture via appropriate sub-joint venture structures in the relevant jurisdictions targeted by the participants.

The joint venture will establish a technical services company (Techco) to be jointly owned by AngloGold Ashanti and De Beers. The participants intend to develop Techco into a fully-functional marine exploration and mining services company, including all the skills, expertise and further proprietary technology that it may develop or acquire, within the joint venture.

Techco and DBM will provide the necessary, skills, expertise, technology and facilities related to marine exploration and mining activities on the continental shelf, under various service agreements to be entered into with the various sub-joint venture opportunities pursued by the participants," the parties added.

"AngloGold Ashanti's funding commitment (via AGAME) under the joint venture, subject to regulatory approval (including that of the South African Reserve Bank) and AngloGold Ashanti's ongoing approval of budgets and work programmes, is to sole fund the joint venture and Techco until the completion of an initial exploration period of at least three consecutive sampling seasons as approved and budgeted for prior to 31 December 2012, or the date upon which AngloGold Ashanti has sole funded a total amount of US$40 million, whichever milestone is achieved first.

"Upon the conclusion of this period, AngloGold Ashanti will have earned-into equivalent interests to De Beers in all the sub-joint venture opportunities pursued under the joint venture. Following this initial exploration period, AngloGold Ashanti and De Beers will be equal partners in the joint venture and will therefore equally fund and share in the benefits arising from all existing and future opportunities pursued under the joint venture.

"AngloGold Ashanti and De Beers will seek to secure majority interests for the joint venture in any sub-joint venture that involves a third party," the statement said.

"By combining one of the world's most successful gold exploration teams with the foremost authority in ocean mining and exploration, we're creating a powerful base to tackle this new frontier," AngloGold Ashanti Chief Executive Officer Mark Cutifani said.

"By building on our current terrestrial exploration, development and mining activities globally we'll work to expand our resource base from an exciting array of shallow marine prospects."