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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (50656)	12/22/2000 9:59:55 AM
From: AllansAlias	Read Replies (3) \| Respond to of 436258

Buck creamage continues against a drunken backdrop. Got time bomb?

To: Lucretius who wrote (50656)	12/22/2000 12:06:49 PM
From: yard_man	Respond to of 436258

London (Platts)--19Dec2000 Anglogold has sold its Elandsrand and Deelkraal gold mines to fellow South African producer Harmony for a cash sum of Rand 1-bil ($129-mil) in the latest burst of consolidation in the country's mining industry. The deal, which has been expected since both companies entered talks on Nov 27, will allow Harmony, an acquisitive South African producer, to add two high grade-ore mines to its portfolio and would increase its gold output to 2.8-mil oz/year. For Anglogold, the sale allows the largest global producer of gold to dispose of two unprofitable mines, which this year alone have ran at a loss of $8.4-mil. Bobby Godsell, CEO of Anglogold said: "These disposals are consistent with AngloGold's strategy of concentrating on higher margin, long-life operations." The sale will also reduce Anglogold's cash costs to $197/oz and total costs to $237/oz, reducing AngloGold's annual gold production from its South African mines by approximately 500,000oz. Harmony CEO Bernard Swanepoel said the company would invest Rand 500-mil at Elandsrand, which like Deelkraal, is some 50km west of the company's Rustenburg complex. "Within five to six weeks we will be taking over the management of operations, and we will fund the new investment from year two of our ownership in 2001." He added that he expected Elandsrand to operate on cash costs of $220/oz, depending on the exchange rate against the dollar." At Deelkraal, Swanepoel expected cash costs to range $235-250/oz, "as we don't foresee the kind of investment at the mine that is required at Elandsrand." Despite the depressed gold price of $270/oz, Swanepoel said the mine would still return a healthy profit. Last year, some 631,000oz were produced at Deelkraal, and a further 404,000oz produced in the months up to September 2000. One South African analyst said Harmony faced a tough challenge in making the mines profitable. "To turn these mines around Harmony will need spend a lot of money, particularly as they are deep level mines. But if they have enough open face ore to keep volumes up, and if they use their proven geological skills the way they have done in the past, then these mines could benefit Harmony's profile." "My only major worry is that after Anglo, who are a consistently competent operator, Harmony may find it difficult to transform the mines as they have done with others in the past." It is likely that Harmony will a black empowerment partner on board for the project. "Not only does it make good sense politically and economically, such a requirement is likely to be become law," the analyst added. On Monday, the Department of Minerals and Energy unveiled the draft form of its Minerals Development Bill, which is discussion stage until next March. Under the bill, South Africa's mining companies would be compelled to redress past imbalances in the industry through partnership with smaller black-owned companies in future and existing projects.