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James Turk: Another 25-year high for gold
AngloGold Sees Growth,
Explores Takeover Options
By Orla Ryan
Reuters
Sunday, April 30, 2006
http://za.today.reuters.com/news/newsArticle.aspx?
type=businessNews&storyID=2006-04-
30T095601Z_01_ALL035728_RTRIDST_0_OZABS-GHANA-ANGLOGOLD-20060430.XML
ACCRA, Ghana -- AngloGold Ashanti expects its gold production to
grow by 500,000 ounces through organic growth next year and is
continuing to explore takeover options, chief executive Bobby
Godsell said on Saturday.
Anglo American Plc announced plans last month to surrender control
of AngloGold, the world's third-largest gold producer, by cutting
its 51 percent stake, leaving the firm free to use its equity for
takeovers.
Speculation has been rife that AngloGold might make a bid for Gold
Fields, a deal which would create the world's biggest gold producer
with output of over 10 million ounces.
"We explore options all the time. We have no bid or deal to
announce. In the 10 years I have been in the job there has never
been a time when we have had a longer pipeline of organic growth
projects," Godsell told Reuters in an interview.
"We are projecting to add 500,000 ounces to production next year
through organic growth," he said.
But Godsell said there were some limited synergies between the two
companies, which operate in the same countries.
"We could look for synergy at country level -- South Africa, Ghana,
and Australia. We could have the same country office. Given the
market caps of the two companies, the level of corporate cost saving
would be relatively modest," he said.
Asked whether AngloGold would have to pay a premium for Gold Fields
that might erode any value in a deal, Godsell said:
"If you are going to create value by buying another company in the
marketplace, there has to be a reason why the full value is not in
the price. ... You have to have a good reason to buy at a premium."
North American producer Goldcorp, seen as a fast-rising company
wanting to do deals, has also been touted as a possible takeover
target.
"We are constantly on the lookout for making money for shareholders.
We wouldn't eliminate anything. If it was an acquisition, we would
have to be very confident of value," Godsell said when asked about
Goldcorp.
AngloGold Ashanti's practice of hedging -- selling gold in advance
at fixed prices -- has been cited by some analysts as an obstruction
to a potential deal with Gold Fields, which wants to be exposed to a
rising gold price.
"We are in active de-hedging mode. Our objective is to ensure our
stakeholders benefit substantially from rising gold prices," Godsell
said. "Our aim is to be between 5 and 10 percent below the spot in a
rising market."
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