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Gold/Mining/Energy : SOUTH AFRICAN MINING -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (344)	12/7/1998 6:03:00 PM
From: Giraffe	Read Replies (1) \| Respond to of 472

Monday December 7, 1:50 pm Eastern Time FOCUS-Minorco buy gives AngloGold global presence (Adds comments from conference call, analysis) By Darren Schuettler JOHANNESBURG, Dec 7 (Reuters) - South Africa's AngloGold Ltd, the world's biggest bullion producer, on Monday snapped up the gold assets of Minorco SA in a $550 million deal aimed at transforming AngloGold into a truly global company. The acquisition of Minorco's gold mines in the United States, Brazil and Argentina will boost AngloGold's annual output by 12 percent to 7.5 million attributable ounces, or 10 percent of world gold production. It is the latest step in a strategy to expand globally, lure foreign investors and earn the higher stock ratings enjoyed by mining rivals in North America and Australia. AngloGold Chief Executive Bobby Godsell said new assets would boost shareholder value, and he confirmed the company is seeking other deals worldwide. ''What we are doing with this acquisition and what we want to continue to do...is diversify our ability to make money out of mining gold,'' Godsell told a conference call with analysts. ''We are certainly actively looking,'' he said, adding that breaking out of South Africa will enable AngloGold to spread its country risk and benefit from other types of mining. AngloGold's stock closed up 100 cents at 238.00 rand on the Johannesburg bourse, off a session high of 240.00 rand. Minorco eased 30 cents to 94.50 rand. ''It looks like fair value,'' one Johannesburg analyst said, but he added it was too early to make a fuller assessment. AngloGold said the Minorco mines would have a ''mildly positive'' impact on the company's earnings in the short term as they undergo high capital spending. They are expected to make a bigger impact on earnings in about four years. The announcement comes nearly two months after South Africa's Anglo American Corp unveiled a blockbuster merger with sister company Minorco and announced its intention to sell Minorco's gold assets. AngloGold won after a bidding process that involved several parties which Minorco declined to name. Minorco, which produces 800,000 attributable ounces per year, said it was a favourable deal for its shareholders. ''The sale price puts value on Minorco's gold assets which in the past was not reflected in our share price and will enable Minorco to reduce its debt levels accordingly,'' said Minorco Chief Executive Hank Slack. With the bulk of its gold mines in South Africa, the Minorco deal gives AngloGold a major foothold in North and South America. Minorco's gold assets include the U.S-based Independence Mining Co, which operates the Pikes Peak Mining Co in Colorado and holds a 70 percent stake in the Jerritt Canyon joint venture in Nevada. In Brazil, Minorco owns the Mineracao Morro Velho mines and 50 percent of a joint venture in the Mineracao Serra Grande mines. AngloGold also gets a 46.25 percent stake in Argentina's Cerro Vanguardia mine and gold exploration activities in South American and the United States. AngloGold said the Minorco deal is likely to boost its worldwide exploration budget to $50 million in 1998. Since it was formed earlier this year through a merger of the gold assets of Anglo American, AngloGold has embarked on a strategy of expanding beyond South Africa's borders. AngloGold listed its shares on the New York Stock Exchange in August. It joined forces in May with Canada's Barrick Gold Corp(Toronto:ABX.TO - news) to explore gold properties in Africa.