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Gold/Mining/Energy : RANDGOLD and EXPLORATION (RANGY) -- Ignore unavailable to you. Want to Upgrade?

To: Bob Dobbs who wrote (438)	10/2/2000 8:49:58 PM
From: Bob Dobbs	Read Replies (1) \| Respond to of 448

Story about Barrick's potential offer to WA contains Randgold speculation. Barrick places offer for South African gold mine Barrick Gold, the North American gold producer, is thought to have made a $275 million indicative offer to buy joint control of a South African gold mine. It is one of two offers received for a 50 per cent stake in the South Deep Joint Venture, half owned by Western Areas Ltd. The South Deep mine is located on the west rand outside Johannesburg. Western Areas and Barrick declined to confirm the report. Vince Borg, Barrick's spokesman, said the group was interested in the mine but only in the context of the mandate it had given its corporate development section to examine the world's orebodies wherever possible. Western Areas Ltd's managing director, John Brownrigg, was similarly non-committal. "Written indicative offers have been received and these are being considered by the Western Areas Limited board," the company said. The South Africans retained CIBC to poll market interest in buying Western Areas' stake. However, Brownrigg, has stressed the company wants full value. "We've sent a few companies sailing into the west," he said alluding to some unsatisfactory offers for the mine. Purchase of the mine also has a number of complexities attached including certain tax-related issues and Western Areas' hedge book which is estimated to have a negative $42 million (R300 million) mark to market value. Brownrigg said the company was also giving thought to retaining joint control of the mine if a full price was not received. The company was "... closely examining the Western Areas Ltd cash resources against an optimum financing plan to complete the current project with a view to returning to shareholders any indicated surplus funds". In the event of this, Western Areas could pay shareholders a special dividend from its cash pile. This cash partly dates from the sale of half of the mine to another North American, Placer Dome, for about $235 million in 1998. The following year, Western Areas was to be the vehicle of a merger involving Randgold & Exploration and a number of associated companies. However, the plan was scuppered at the last moment. Placer Dome has a large say in the destination of the 50 per cent of South Deep it does not own. This is owing to the pre-emptive rights over the mine. Spokesman Patrick Evans says the company continues to monitor the situation and that it is happy with its pre-emptive rights. There's a potential legal dispute, however: Western Areas said in the past that the pre-emptive right was not binding under certain conditions. Certainly a plan to revive the Western Areas-Randgold & Exploration merger is unlikely. Expect, however, a renewed round of cautionary statements from the Randgold group. Market speculation is that plans to transact a fresh merger, probably involving Randgold & Exploration and Randgold Resources, are underway. Iamgold, the company which owns a stake of the Sadiola project in Mali with AngloGold, has also been connected with Randgold in a possible merger or buyout. "Iamgold wants this merger more than Randgold at the moment but there are no plans to pursue this aggressively. The proposal has been on the table," a source said. It is thought Iamgold is seeking exposure to Randgold's Morila project, also situated in Mali and in which AngloGold has a controlling stake. Western Areas ended up 40 cents to R15.90 a share on the Johannesburg Stock Exchange. The Gold Index was down 0.25 per cent to end at 951 points amid a weaker gold price. By: David McKay mips1.net