GOLD FIELDS STUD­IED R3,2bn AFRIORE

Finweek English Edition - - Companies & markets - DAVID MCKAY

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.

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