MineWeb and Calandra commentary worth checking out

a href=http://biz.yahoo.com/djus/030502/1157000367_2.htmlhttp://biz.yahoo.com/d...

JOHANNESBURG, Friday, May 2 (Dow Jones) -- Harmony
Gold Mining Co. Ltd. said late Friday that it plans to take
over fellow gold miner African Rainbow Minerals Gold Ltd,
or ARMGold, in a transaction that will create the world's
fifth largest gold producer, producing approximately 4.1
million ounces a year.

Harmony will issue two Harmony shares for every three
ARMGold shares held, the companies said in a statement.

In addition, ARMgold will pay a special dividend of 500
cents per ordinary share.

The takeover will create the largest local producer of gold
ounces in South Africa, the companies said.

quot;Merging the two companies seemed like the logical next
step in both the companies' growth strategies,quot; said
Patrice Motsepe, ARMGold's chairman.

quot;We share one of the industry's best gold assets in Free
Gold and from a cultural, operational, and strategic
perspective, the fit seems natural,quot; he said.

The Free Gold assets refer to those assets in the South
Africa's Free State Province.

Motsepe will become the new chairman of Harmony and
will play an active and extensive role in advancing the
long-term interests of the company.

Adam Fleming, the retiring non-executive chairman of
Harmony said: quot;After four exciting years of being part of
the Harmony team, it is an honor to hand over the reins
to Patrice, who I'm sure will chair the company during
its next phase of development. I am, and intend to remain,
a significant shareholder of Harmony.quot;

The new company will have the benefit of more than 45
percent shareholding in North America with enhanced
liquidity on the New York Stock Exchange.

Bernard Swanepoel, Harmony's chief executive, said
the company is now well-positioned to continue with its
strategy of growth and delivery of shareholder value.

The new company will have operating mines in all the
major gold-producing regions in South Africa.

Most of the synergies will, in the short term, be realized
in the Free State, as the region will now be consolidated
as one operating unit, the companies said.

Optimal use of infrastructure and exploitation of the
orebodies will deliver enhanced returns for shareholders,
they said.

The only other operations of note in the Free State are
Beatrix mine, operated by Gold Fields Limited, and Target
mine, operated by Avgold Ltd , which has a resource base
of 78.1 million ounces of gold, of which 2.6 million ounces
are in the reserve category.

As reported earlier, the two companies have bought a stake
in Avgold through their ZAR1.766 billion purchase in cash of
Anglo American PLC's 34.5 percent stake in Anglovaal Mining
Ltd, or Avmin. Avgold is the gold mining arm of Anglovaal
Mining.

The new Harmony will be well positioned to continue with its
strategy of growth, both locally and internationally, the
companies said.

The acquisition of the stake in Avmin creates an opportunity
for Harmony and ARMgold to participate in unlocking value
within that company, the companies said.

The two companies will hold a joint press conference on May
5 at 0800 GMT.

On the JSE Securities Exchange South Africa, Harmony shares
ended trading up ZAR4.10, or 5.3 percent, at ZAR81.10.