The company said in a statement to the JSE that the transaction would be effected through a merger transaction in which GCGC's shareholders will receive consideration consisting of AngloGold Ashanti ADSs.
A NYSE Arca Exchange-traded company, GCGC's primary investment is its joint venture interest in Cripple Creek & Victor Gold Mining Company (CC&V) located in Colorado.
CC&V is majority owned and operated by AngloGold Ashanti.
"Successful completion of this transaction will enable us to consolidate the full mineral endowment at CC&V over the remainder of the mine's life, while also simplifying the ownership structure of this long-life North American asset," said AngloGold Ashanti executive vice president Richard Duffy.
In terms of the deal, each GCGC shareholders is entitled to receive 29 AngloGold Ashanti Ads for every 100 GCGC shares they hold.
Based on AngloGold Ashanti ADSs $49.59 closing price on the NYSE on Friday, this exchange ratio represents an offer price of $14.38 per GCGC share.
This puts the aggregate transaction value of $149-million, based on 10.35-million shares outstanding on a fully diluted basis.
The price represents a premium of 29.1 percent over the volume-weighted average price of the GCGC's shares during the thirty-day period up to and including Friday, and a premium of 37 percent over GCGC's closing price of US$10.50 on Friday.
AngloGold Ashanti said it had already secured the support of GCGC shareholders holding about 44 percent of GCGC's total outstanding issued common stock.
Best interests of shareholdersThe GCGC board said it believed the transaction was in the best interests of its shareholders and had agreed to recommend that its shareholders approve the deal.
Herbert Hampton, president and CEO of GCGC, said the transaction "represents an attractive premium to market".
"This transaction provides our shareholders with the opportunity to realise liquidity via AngloGold Ashanti's ADSs and to benefit from AngloGold Ashanti's diverse property portfolio," Hampton said.
The transaction is conditional on the securing of all necessary regulatory approvals as well as there being no material adverse change in regards to GCGC or CC&V prior to the closing of the transaction.
The CC&V joint venture was created in January 1991 as a means to develop the Cripple Creek Mining District based on the land holdings consolidated by GCGC.
GCGC provided the land holdings to the CC&V joint venture and a predecessor-in-interest to AngloGold Ashanti provided, among other things, the capital in the form of an initial loan.
When AngloGold Ashanti acquired its majority interest in the CC&V joint venture, it also acquired the initial loan, which has changed over the years with capital infusion and repayment.
Under the terms of the CC&V joint venture agreement, AngloGold Ashanti is entitled to 100 percent of the net proceeds from the CC&V mine until completion of several intermediate stages, including repayment of the initial loan, at which time GCGC becomes entitled to, among other matters, its share of 33 percent of the net proceeds from the CC&V mine.
Shares in AngloGold Ashanti closed 2.99 rand lower at R344 on the JSE on Monday.