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AngloGold (AU) Proposes to Buy Outstanding Corvus Shares

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AngloGold Ashanti Limited’s (AU - Free Report) wholly-owned subsidiary AngloGold Ashanti Holdings plc intends to acquire the remaining interest in Corvus Gold Inc. (“Corvus”) for a cash payment of $370 million. AngloGold currently owns 19.5% indirect interest in Corvus.

Based in British Columbia, Canada, Corvus owns several exploration assets, including North Bullfrog and Mother Lode located in Southern Nevada's Beatty District, adjoining AngloGold’s exploration assets of Silicon, Transvaal and Rhyolite.

This buyout plan supports AngloGold’s focus on expanding ore reserve, building low-cost production and generating sustainable returns. Together, Corvus and AngloGold’s exploration assets will form one of the largest new gold districts in Nevada, while providing scope for AngloGold to create a meaningful, low-cost, long-life production base in a premier mining jurisdiction over the long term.

AngloGold’s buyout proposal comes after Corvus entered into a loan agreement of $20 million with AngloGold North America Inc. on May 6. Per the agreement, AngloGold was granted an initial exclusivity period of 90 days, during which the company was allowed to conduct a detailed due diligence procedure on Corvus and its key assets. The agreement also states that the initial exclusivity period would be further extended by 30 days as AngloGold submits proposal to acquire Corvus assets.

The company is focused on developing key projects across its portfolio. The Obuasi Redevelopment Project was 97% completed during the March-end quarter. AngloGold is on track to meet its priorities for the current year, which includes reinvestment to increase reserves, extend mine lives and improve mining flexibility.

Price Performance

AngloGold’s shares have declined 10.2% so far this year, compared with the industry’s loss of 6.4%.

Zacks Investment Research
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Zacks Rank & Stocks to Consider

AngloGold currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Commercial Metals Company (CMC - Free Report) , Nucor Corporation (NUE - Free Report) and Cabot Corporation (CBT - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals has a projected earnings growth rate of 21.9% for fiscal 2021. The company’s shares have rallied around 51.9% in a year’s time.

Nucor has a projected earnings growth rate of 259.9% for the current year. The company’s shares have soared around 130% over the past year.

Cabot has an expected earnings growth rate of around 126% for the current fiscal year. The company’s shares have surged 60% in the past year.