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South African media full of attention for GATA
Thursday February 1, 9:24 am Eastern Time
Gold Fields profit jumps,confirms AngloGold talks
By Darren Schuettler
JOHANNESBURG, Feb 1 (Reuters) -- South Africa's Gold Fields Ltd on
Thursday reported a 38 percent jump in second quarter earnings and
confirmed it had informal talks on a tie-up with rival AngloGold Ltd .
Gold Fields said net earnings rose to 277 million rand ($36 million),
or 61 cents a share in the quarter to December 31. That compared to
201 million rand, or 44 cents a share, in the previous three months
Gold Fields' second quarter earnings reflected a weak rand and lower
costs, which more than offset a drop in gold production and a
stagnant gold price.
Analysts said the figures were in line with expectations, but the
performance was overshadowed by speculation that the country's second
largest gold miner may be taken over.
Gold Fields chief Chris Thompson said he had informal discussions
with AngloGold chief Bobby Godsell a few months ago, but had not
received an offer.
quot;There is no proposal on the table, formal or informal. I don't know
if it's ever going to happen. We'll wait and see,quot; Thompson said.
Shares in Gold Fields were up 85 cents, or 2.92 percent, at 30 rand
on the Johannesburg bourse. The market currently values the company
at around 13.5 billion rand ($1.7 billion).
quot;It seems there is something out there, but it's now a question of
time,quot; one analyst said after the briefing.
Speculation has mounted that world number one producer AngloGold and
Canada's Barrick Gold are eyeing Gold Fields, which has an annual
output of four million ounces.
Gold Fields has been considered in play since the government blocked
a proposed $3.7 billion merger with Canada's Franco Nevada last year.
The stock later hit a year low of 19.70 rand in November, well off
its high of 35.10 in February.
MERGER NOT SEEN IMMINENT
Godsell said on Wednesday that he could not rule out a bid for Gold
Fields, but he added he had no deals to announce.
Thompson said Gold Fields' management would not stand in the way of a
good deal for shareholders. quot;If they put something meaningful on the
table, we would not get into a protracted, value-destroying defence,quot;
But Thompson added: quot;Gold Fields is just getting its act together. It
would be unfortunate to break Gold Fields up.quot;
Operating profit improved 21 percent to 519 million rand in the
second quarter, led by a strong performances at the Beatrix mine in
South Africa and its Tarkwa mine in Ghana.
A weaker rand and lower production costs more than offset a drop in
gold output and the dollar gold price.
quot;We have a fair degree of confidence that over the next year we can
improve on earnings ... even if the gold price does not help us,quot;
Thompson told a results briefing.
Attributable gold production was down three percent to 941,000 ounces
in the December quarter.
The output decline was due mainly to seismic events in the West Wits
region, grade weakness at the Driefontein mine, and a downscaling of
operations at the Libanon mine.
BLACK EMPOWERMENT DEAL
A gold price of $269 an ounce in the quarter, down from $277, was
offset by the rand's decline to 7.60 against the dollar from 6.99 in
the September period.
As a result, the gold price received in rand terms jumped six percent
to 65,714 rand per kg in the December quarter.
The weaker exchange rate helped to push cash costs in dollar terms
down seven percent to $191 an ounce, while total costs dropped to
$211 an ounce from $226 an ounce.
In rand terms, cash costs were nearly flat at 46,761 per kg.
Thompson said the company was considering a black empowerment deal
that would include its troubled St Helena mine, but details would be
released at a later date.