GOLD FIELDS STUDIED R3,2bn AFRIORE
FRESH FROM its enormous R18bn ($2,5bn) takeover of the South Deep mine from Barrick Gold and Western Areas, Gold Fields considered bidding for control of a R3,2bn ($450m) SA-based platinum project. This was the Akanani prospect owned by the Torontolisted company, Afriore, and eventually bought by the UK’s Lonmin at the above-mentioned value. Gold Fields business development director, John Munro (pictured), says he can’t comment on such speculation, but he does recognise interesting poten- tial in a deposit like Akanani.
“It’s probably one of the better looking orebodies on the eastern limb [of the Bushveld],” he says. The deposit also lends itself to mechanised mining, which is thought to have attracted Gold Fields. Moreover, Gold Fields was not alone: Xstrata and Impala Platinum expressed an interest in Akanani, a deposit that could be made into a 250 000oz/year platinum mine – about 25% of Lonmin’s projected platinum output, according to John Meyer, an analyst for Numis Corporation in London.
Apart from underlining Gold Fields’ continuing acquisition desires, the notion of the gold group entering the platinum industry on this scale has important strategic ramifications. With 250 000oz/year of platinum, Akanani does not represent a toe-in-the-water investment in other metals, but a definite plunge.
Today, however, Munro says Gold Fields would still look at diversification into other metals if new gold opportunities had been exhausted. It would continue to be opportunistic, particularly on the gold side, he said.
Gold Fields is playing with fire looking at platinum. The theory is that shareholders see dilution rather than addition in a gold company owning platinum ounces, even though platinum is more valuable than gold.
Says Munro: “We’re very focused on the scale of growth we have. That is a priority. But in the gold industry, you can’t choose when opportunities come along. You have to remain vigilant.”
He makes little mention of other platinum prospects, but there’s a definite sea-change in that sector of the mining industry.