QKR Corp., a mining investor founded by former JPMorgan Chase & Co. banker Lloyd Pengilly, is in talks to acquire a Namibian gold mine from AngloGold Ashanti Ltd. (ANG), according to three people familiar with the matter.
AngloGold and QKR, backed by Qatar’s sovereign wealth fund and Jan Kulczyk, Poland’s richest man, are in advanced discussions and a deal may be announced as soon as this week, said the people, who asked not to be identified because the information isn’t public. The price may be about $110 million, one of the people said, while another said it may be closer to $120 million.
The open-pit Navachab mine, about 170 kilometers northwest of the capital Windhoek, produced 68,000 ounces of gold a year and employed 482 people in 2008, according to its website. It would be QKR’s first acquisition after a review of a number of assets in the past 12 months, one of the people said.
Some of the world’s largest mining companies are selling assets to cut costs after the global economic slowdown eroded growth in commodity demand, dragging down prices. Among investors seeking to acquire them are Mick Davis, former chief executive officer of Xstrata Plc, and Barrick Gold Corp. (ABX) ex-CEO Aaron Regent.
Davis has already raised $1 billion from Noble Group (NOBL) and private-equity fund TPG to start X2 Resources, which is seeking coal, copper and zinc assets. Ernst & Young LLP said Feb. 3 that mining mergers and acquisitions will probably increase this year, led by more than $10 billion of privately funded deals, after 2013 saw the fewest buyouts in seven years.
Former Barrick CEO Regent started investment company Magris Resources last year, seeking mining assets mainly in the Americas, with backing from institutional and private-equity investors, a person familiar with the situation said in May. Magris studied a bid for Glencore Xstrata Plc’s Las Bambas copper project in Peru last year, a person with knowledge of the matter said at the time.
AngloGold, with 21 operations in 10 countries, scrapped its dividend in August and is cutting jobs and spending to weather a decline in the price of bullion. Gold plunged 28 percent in 2013 and has risen about 3.6 percent this year to $1,248.49 an ounce.
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