Durban Deep leads the gold cause and the gold shares

By Allan Seccombe and James Regan
Reuters
January 18, 2002

Newmont Mining Corp won the fight for Normandy Mining
Ltd. on Friday as AngloGold Ltd bowed out, clearing the
way for the U.S. company to assemble the world's largest
gold mining house.

South Africa's AngloGold scraped together acceptances
representing just 7.1 percent of Australian miner Normandy
for its cash and scrip offer which expired at 0800 GMT on
Friday.

quot;The company believes that it is not possible for
AngloGold to obtain majority control of Normandy and
has therefore closed its offer,quot; the world's former No. 1
gold producer said.

With AngloGold throwing in the towel, Newmont
leapfrogs the South African group into the top spot.
The world bullion industry has seen a wave of
consolidation as producers strive for economies
of scale amid dull gold prices.

AngloGold Chairman and CEO Bobby Godsell said
the group was disappointed, but it would not overpay.
quot;We gave the bid our very best effort. The competing
bidder has seen more value in the Normandy assets
than we were able to identify reliably and therefore
made a higher offer.quot;

One analyst said: quot;It is a pity that AngloGold couldn't get
10 percent of Normandy. That would have prevented
the compulsory acquisition of Normandy's shares by
Newmont. Now they don't really have any leverage in
dealing with Newmont.quot;

The four-month battle with U.S.-based Newmont ended
messily as the market was initially told the Anglogold
offer was extended.

AngloGold legal advisers, Freehills, mistakenly
notified the Australian Stock Exchange that AngloGold
had extended its offer, causing some confusion in
trading of AngloGold shares, an AngloGold
spokeswoman said.

The ASX broadcast the news of an extension over
its public address system.

Newmont has had the blessing of Normandy's board
and Franco-Nevada Mining Corp., the Australian firm's
largest shareholder with a 20 percent stake, from the
outset.

Newmont is also offering US$2.58 billion in shares to
buy Franco-Nevada, which derives most of its income
from gold royalty payments.

AngloGold's final bid valued Normandy at A$1.99 a
share, or A$4.44 billion (US$2.26 billion), versus
Newmont's A$2.04, or A$4.56 billion. Newmont's
offer closes on February 15.

Newmont increased the cash part of its offer on
January 3 to A$0.50 and 0.0385 Newmont shares
for each Normandy share.

The bids catapulted Normandy shares above A$2
each -- nearly double the price when AngloGold
launched its bid on September 5.

Normandy finished four cents lower at A$2.01 on
Friday, with AngloGold saying it quit coming after
the close of trade.

quot;The big question now is what is AngloGold's Plan
B. There are a lot of rumours of a number of small
acquisitions in Africa and Australia,quot; said gold
analyst Alan Cooke at Johannesburg brokerage
Rice Rinaldi.

Possible takeover targets include South Africa's
No. 2 gold miner Gold Fields , Ashanti Goldfields in
Ghana and Australia's Aurion Gold, he said. quot;There
is lots left for consolidation, but the North Americans
are obviously winning the day in the consolidation
game.quot;

Godsell said AngloGold had five major capital
projects that would come into production in the next
three years, with an output of 20 million ounces of
gold over the life of the projects at an average cash
cost of around $147 an ounce.

quot;AngloGold will also seek value growth through its
substantial and focused exploration programme,quot; he
said. He did not specify the projects and AngloGold
officials declined requests for interviews.

The market was also pondering the future of
AngloGold's relationship with Canada's Barrick Gold,
with which it had planned synergies dependent on
winning the Normandy bid.

At 1200 GMT AngloGold was 3.4 percent lower at
460 rand, underperforming the stock exchange gold
index, which was down 2.5 percent. AngloGold earlier
touched a session low of 456 rand.

quot;I think people who were positioned for the deal to
go ahead are happy to get out of the stock now. They
also are considering that AngloGold sold its Free
State assets for 2.2 billion rand, and they are now
worth more than three,quot; said an analyst.

AngloGold wanted Normandy to accelerate a push
to hold more mining assets outside Africa, but was
outbid by Newmont despite sweetening its original
scrip offer twice with cash.