ESF admits working with Fed to keep close watch on gold

By Walter Watson

SYDNEY, Dec 27 (Reuters) -- South Africa's AngloGold Ltd hit back
against Newmont Mining Corp in the battle for Normandy Mining Ltd
on Thursday, boosting its bid by 10 cents cash a share to value the
Australian gold miner at about A$4.1 billion (US$2.1 billion).

However, at the close of Australian trade the offer still valued
Normandy at only A$1.83 a share, compared to Denver-based
Newmont's offer valuing Normandy at A$1.87 a share and
Normandy's Thursday's close of A$1.85. Normandy's intraday high
of A$1.86 was equal to the more than four-year high struck on
December 19.

quot;The last card is yet to be played,quot; said Hartley Poynton analyst
John Featherby of the long running takeover battle.

quot;Normandy looks to be getting near full value at these prices, but
you get the feeling there is still the possibility of the ante being
upped again. In other words, another increase in the offer of up to
around A$2 per share.quot;

An independent valuation at the start of the battle said Normandy
was worth between A$1.48 and A$1.88 a share.

Normandy is a much sought-after prize as its two million ounces
of gold production annually will make the winning bidder the world's
largest producer of the precious metal.

AngloGold is currently No. 1 gold producer, with Barrick Gold
Corp., fresh from its merger with Homestake Mining Co., as No. 2.
However, a merged Newmont/Normandy group would leapfrog both
into top spot.

Both offers are for cash and scrip -- AngloGold offering 2.15
AngloGold shares for 100 Normandy shares plus 30 cents Australian
cash for every Normandy share, and Newmont offering 0.385
Newmont shares plus 40 cents Australian cash for each Normandy
share.

Recent speculation Barrick may enter the fray as a third bidder
could be misplaced with AngloGold saying it was in talks on
co-operation with the Canadian gold giant.

quot;AngloGold has cooperated with Barrick in the past, and is
presently engaged in discussions with Barrick aimed at
identifying synergies that the two companies can realise in
regard to their mining operations globally, but specifically in
Australia, and Tanzania,quot; AngloGold said in a statement.

AngloGold said it would continue to share half ownership of
the giant Super Pit mine in outback Australia with Barrick if its
bid for Normandy was successful, but management control
would be handed to Barrick. AngloGold said it would also
offer Barrick participation in the Boddington gold ore project.
AngloGold's stake in Boddington would lift to 77 percent from
33 percent if it won control of Normandy.

Normandy has previously recommended Newmont's bid,
which also has the support of Normandy's 19.99 percent
owner Franco-Nevada Mining Corp, for which Newmont is
also bidding.

Normandy's initial response, and that of Newmont, to the
sweetened AngloGold offer was that shareholders should
take no immediate action.

quot;Shareholders should do nothing with respect to their
shareholding in Normandy at the present time, particularly
given the extended closing date of the AngloGold offer of
January 11, 2002,quot; Normandy said in a statement.

In its own statement, Newmont said it would respond to
AngloGold's raised offer in due course.

(A$1=US$0.51)