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Gold''s veterans counsel patience
From Reuters
Wednesday, August 11, 2004
http://biz.yahoo.com/rc/040811/minerals_iamgold_goldfields_2.html
JOHANNESBURG -- Gold Fields Ltd. plans to take
control of mid-sized Canadian gold firm Iamgold
Corp. in a $2.1 billion deal which will create the
world's seventh biggest gold miner, the firms said
today.
Gold Fields, the world's fourth largest gold producer,
is merging its international operations with Iamgold
to create a new company to be renamed Gold Fields
International.
South Africa's Gold Fields will receive 351.7 million
Iamgold shares worth $2.1 billion as part of the deal,
it said in a statement. The new firm will be 70 percent
owned by Gold Fields.
Iamgold, subject of a bidding battle and being stalked
by small U.S. gold producer Golden Star Resources
Corp., recommended to shareholders that they not tender
their shares to Golden Star.
"Given the clearly superior transaction available with
Gold Fields, the board strongly advises shareholders
not to tender to the Golden Star offer and to await
further instructions regarding the Gold Fields
transaction," the Canadian company said in a
statement.
Shares in Iamgold jumped 9.59 percent to C$7.66
while Gold Fields shares were little changed after
the announcement, down 0.84 percent at 65.15
rand.
Iamgold shareholders will own the remaining 30
percent of the new company and receive a special
dividend of 50 Canadian cents.
The new company is expected to be the world's
seventh biggest gold producer, with production of
2.0 million ounces in 2005, rising to 2.4 million in
2007.
Iamgold has been the subject of a bidding battle
after its plan to merge with Wheaton River Minerals
Ltd. failed last month.
It was being stalked by Golden Star which -- like
Iamgold -- has operations in West Africa. Iamgold
had rejected Golden Star's approaches and opened
itself up to other bidders.
"The board and management of Iamgold have
concluded that this combination is superior to any
of the other proposals received or currently on the
table and should result in the creation of sustainable
value for shareholders," Iamgold Chief Executive
Joseph Conway said.
Gold Fields was mentioned as a possible suitor
because it already has a partnership with Iamgold
in the Tarrkwa and Damang mines of Ghana.
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