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Harmony to start share sale to fund AngloGold deal

Deal will make Harmony South Africa’s biggest gold producer.
Image: Bloomberg

Harmony Gold Mining Company, one of South Africa’s biggest gold miners, said it will start its proposed share sale on Wednesday to raise $200 million to part fund its purchase of a rival company’s assets.

Harmony agreed in February to buy rival AngloGold Ashanti’s assets in South Africa, including the world’s deepest gold mine the Mponeng mine, for about $300 million.

After completion, the deal will make Harmony South Africa’s biggest gold producer.

The details of the share sale, which is being done through a placement of ordinary shares, such as the closing date, the price of shares and allocations to investors will be decided in due course, Harmony said in a statement.

All South African miners, except those mining coal, were hurt by a month-long lockdown in April as the government tried to contain the spread of the novel coronavirus.

The miners were allowed to operate with a workforce of 50% from May and 100% from June, under strict social distancing guidelines.

The relaxation helped Harmony increase its gold sales from the South African operations from approximately 1 tonne in April to approximately 1.7 tonnes in May, it said.

Shares of most gold mining companies have surged in the last few months as fears of a global economic slowdown pushed investors’ money into safe-haven gold.

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