Will gold rise follow squeeze in silver?

By Darren Schuettler

JOHANNESBURG, Jan 4 (Reuters) -- AngloGold Chairman
and CEO Bobby Godsell said on Friday his company's
offer for Australia's Normandy Mining was final and it was
now up to Normandy's shareholders to decide.

However, Godsell told Reuters in an interview that he was
encouraged by the narrowing gap between AngloGold's
offer and a richer bid from U.S. rival Newmont Mining Corp.

AngloGold refused on Thursday to increase its offer for
Australia's biggest gold miner after Newmont added
another cash sweetener in a bid to knock out its South
African competitor.

Normandy's board has recommended the Newmont bid.

quot;I will be disappointed if we lose Normandy, without doubt.
Will I be devastated? No. This is a company that has lots of
irons in the fire and will go forward,quot; Godsell said.

quot;What I'm very clear about is that it's better to lose
Normandy than overpay,quot; he added.

With the global gold mining industry undergoing a wave of
consolidation to drive down production costs amid sluggish
bullion prices, Normandy and its annual two million ounces
of output is a much sought-after prize.

In a statement after Newmont hiked its offer on Thursday,
AngloGold said its bid was quot;full and fair and the company
has no basis upon which it could justify an increase in its
offer.quot;

Godsell said on Friday AngloGold's bid was final.

quot;In terms of this particular bid for Normandy this is our
final offer. It's on the table, it's unconditional and it
will go away on January 11,quot; he said.

Analysts have said the battle for Normandy may be far
from over as a dip in Newmont's New York-listed shares
and an increase in AngloGold's shares closed the gap
between the rival bids by the end of New York trading
on Thursday.

When Newmont boosted the cash element of its offer, it
valued Normandy at A$4.3 billion (U.S.$2.2 billion).

But with Newmont's shares falling by eight cents to $18.61
and AngloGold's U.S. shares rising by 58 cents on
Thursday, Newmont's offer stood at A$1.92 per share,
just six cents above AngloGold's bid. quot;Each trading day
will bring a new set of realities, but I think if the bids
are close to each other we have a credible case to say to
people: 'Now choose the kind of company that you want,'quot;
Godsell said.

quot;I think if we are in the4-5 percent difference range, then
people would be prudent to look at it,quot; Godsell said,
adding he may travel to Australia next week to make a
final pitch to Normandy shareholders.

AngloGold is offering 2.15 of its shares for every 100
Normandy shares, and 30 Australian cents per share
cash.

Newmont added another 10 Australian cents cash on
Thursday, raising its offer to 50 cents cash plus 0.0385
Newmont shares for each Normandy share.

AngloGold has argued its bid offers better value because
the South African firm has a stronger track record of
profitability, generating cash, and paying dividends.

It is also telling Normandy shareholders that by opting
for Newmont they would have to wait at least another
six to eight weeks before the deal received approvals
from the Securities and Exchange Commission in the U.S.

AngloGold's offer has already been approved by the SEC.

Godsell said hedge funds concerned about timing and
certainty should favour AngloGold's bid. quot;For the rest of
the shareholders it's going to be which stock would they
like to hold,quot; he said.

The winning bidder will become the world's No. 1 gold
producer -- a title currently held by the South African group.

But Godsell said its pursuit of Normandy was not about
securing industry bragging rights, but being a profitable
company with good returns, capital growth, and decent
dividends.

He said AngloGold would seek other acquisitions, both
on the corporate side and individual mines, to continue
diversifying its production base if Normandy slipped
through its fingers.

AngloGold has been selling off its less profitable mines
in South Africa, which produces about half the company's
7 million ounces of annual output, and acquiring low-cost
assets in the rest of Africa, the Americas, and Australia.

It has secured the support of Canada's Barrick Gold for
the Normandy bid and spoken of greater cooperation
between the two gold giants. quot;I very much hope that we
continue to cooperate with Barrick in a range of ways,quot;
Godsell said.