June 30, 2008

State’s Largest Gold Mine Changing Ownership

By Wayne Heilman, The Gazette, Colorado Springs, Colo.

Jun. 30--In the biggest deal in the Cripple Creek-Victor gold-mining district, shareholders of Golden Cycle Gold Corp. today approved a takeover by South African mining giant AngloGold Ashanti Ltd., clearing the way for the company to assume full ownership of Colorado's largest gold mine.

AngloGold will pay $109.7 million in stock for Golden Cycle, which owns one third of Cripple Creek & Victor Gold Mining Co., which employs 346 in the mining district between Cripple Creek and Victor and is expected to produce 290,000 ounces of gold this year. AngloGold owns the other two-thirds of the joint venture.

The deal, expected to be completed early Tuesday, will end more than a century of involvement in the mining district by Golden Cycle and its predecessor companies. Golden Cycle Co. was incorporated in November 1895, and related companies later owned a gold mill along U.S. Highway 24 and developed the Rockrimmon neighborhood.

Little is expected to change at the mine, which already is managed by AngloGold and last year produced 281,820 ounces of gold and 89,020 ounces of silver. Mining is now scheduled to be completed by 2012, but the the mine has sought state and county approval to extend operations until 2016.

The transaction was valued at $149 million when it was announced Jan. 14, but the value dropped 26.3 percent in the last 5 1/2 months as the price of AngloGold's stock has fallen. Under the deal, Golden Cycle shareholders will receive 0.3123 shares of AngloGold stock for each Golden Cycle share they own.

Golden Cycle owned most of the land in the Cripple Creek-Victor mining district and contributed to the joint venture; its partners provide financing and management for exploration, mining and processing the ore.

Golden Cycle also owns gold mining sites in Nevada and the Philippines and 7,300 acres of oil and gas rights in Fremont County.


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