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Financial Times: Investors snub gold amid market tumble

Section: Daily Dispatches

By Dow Jones News Service
Published in Business Report, South Africa
March 15, 2001

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Denver -- Gold Fields has had exploratory discussions with
AngloGold within the last two months about combining the
two gold companies, but nothing definitive has come from
those talks, Ian Cockerill, the managing director of Gold
Fields, said on Tuesday.

The companies were quot;exploring ideasquot; as to quot;whether it
made sensequot; to join the companies, said Cockerill. The
discussions with AngloGold have been quot;on and offquot;, he said.

In addition, during the same two-month period, Barrick
Gold, a large gold mining company based in Toronto, quot;at one
stage expressed an interestquot; in combining with Gold Fields,
said Cockerill. But no proposal was made, he said.

Cockerill declined to say whether the talks with Barrick were
related to the talks with AngloGold. quot;Let's just say that
discussions took place,quot; he said.

News reports from South Africa in February said there was
speculation that AngloGold and Barrick would jointly try to
take over Gold Fields. Cockerill said, however, there had been
no hostile takeover threat that he was aware of and no offer
had been made.

quot;There's been nothing definitive that's been laid on the table,quot;
he said.

Would it be possible to do a deal with both Barrick and AngloGold?

quot;Three-way deals are never easy,quot; responded Cockerill. He said he
had learned over the years to quot;never say never,quot; but a three-way
deal would have logistical problems.

As for Denver-based Newmont Mining, the large gold producer in
North America, Cockerill said: quot;There's not been anything
substantive we've discussed with Newmont.quot;

The speculation about Gold Fields combining with another company
has followed the blockage by the South African government of Gold
Fields' proposed $1,8 billion merger with Canada's Franco-Nevada.

quot;The (Franco-Nevada) deal, as we originally wanted to do it, died in
December of last year,quot; Cockerill said. There were still on-off
discussions with the South African government, and if the government
should change its mind, quot;I think we would do it in a heartbeat,quot; he
said of the Franco-Nevada merger. But technically, the deal is dead,
Cockerill said, and both Franco-Nevada and Gold Fields had put the
issue aside.

Gold Fields was still looking for acquisitions, but cost reduction,
improving recoveries, and judicious expansion of output at existing
properties appear to offer more value and for less risk, Cockerill

Improvements in those areas quot;give us very good returnsquot;, he said.

The company's budget for capital expenditures for the year to June
2002 was about $150 million, about on par with the current fiscal
year, Cockerill said.

If Gold Fields found a property or company acquisition it liked,
however, it was well-positioned to make a move, according to
Cockerill. The company had no debt, he said, and he believed it
could comfortably raise up to about $350 million in debt for an
acquisition. Its market capitalisation was about $1.6 billion.

In addition, the company's stock had risen over the past 18
months, so the ability to use stock as currency in an acquisition
had been enhanced, he noted.

Gold Fields' shares dropped R1,10 to close at R32 on the JSE
Securities Exchange yesterday.