More from GATA at Indaba 2001 conference

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By Stewart Bailey
South Africa Business Report
www.businessreport.co.za
February 7, 2001

Cape Town -- The main feature of the opening day of the African
Mining Indaba yesterday was continued speculation that Gold Fields,
the country's second-largest gold producer, was to be the target of a
hostile takeover bid by rivals AngloGold and Barrick.

Mining analysts and corporate financiers from across the globe were
unanimous that a raid was imminent, although nobody could settle on
the form the transaction would take.

The speculation was fuelled by consecutive speeches delivered by
Kelvin Williams, the marketing director of AngloGold, and Alan Hill,
the executive vice-president of development of Barrick.

Williams was scathing of recent press reports that had sketched
AngloGold's strategy based on information gleaned from a "spokesman
from outside the group".

He said one of the group's strategies was to promote consolidation of
a highly fragmented industry so as to optimise ore bodies and "to put
together, in search for value, the natural ore bodies of the Wits
Basin and elsewhere".

But Williams said AngloGold would only take growth and consolidation
opportunities if there were real advantages for AngloGold
shareholders.

"Whatever the physical rationalisation or consolidation benefits
might be of a transaction, every transaction has a walk-away price.
AngloGold will not pay a price for assets which would destroy value.

"For this reason we prefer mergers which can provide long-term
benefits to shareholders of both companies, rather than acquisitions
which trigger short-term market response and the payment of large
premiums," Williams said.

Analysts said this remark dampened expectation of as much as a $7 a
share cash bid for Gold Fields by AngloGold and Barrick.

Hill, speaking on Barrick's Bulyanhulu gold project in Tanzania, said
the 400 000 ounce-a-year mine, which would start production in March
at cash costs of $130 an ounce, was "a great way (for Barrick) to
debut in Africa". He said the project was also "early days for
Barrick in Africa."

Barrick is the only A-rated firm in the gold industry, giving it a
higher credit worthiness rating than its peers. It has $623 million
in cash and low debt levels.

One Canadian mining analyst said Barrick could not afford to remain
out of South Africa for much longer as it was becoming an
increasingly crucial part of its own globalisation strategy.

He said the Canadian producer would be eager to have a South African
partner that knew how to operate in a difficult political, labour and
technical environment.

The analyst said apart from the often-mentioned targets of Gold
Fields and Western Areas' 50 percent stake in the South Deep joint
venture, Barrick would potentially be interested in Avgold's 350 000
ounce-a-year Target mine in the Free State.

But the analyst said Barrick would be likely to wait until the
commissioning of the mine, to reduce its risk profile, before making
an offer.