Gold in them thar hills

AngloGold is making an offer to acquire Normandy, Australia’s largest gold company, in a move that will establish it as the largest gold producer in Australia and Africa.

AngloGold is offering Normandy shareholders 2.15 AngloGold shares for every 100 Normandy shares.

The offer values Normandy at A$ 3.2 billion (A$ 1.42 per share) and represents a premium of 29% to Normandy’s closing share price on the Australian Stock Exchange on 4 September 2001, based on AngloGold’s closing share price on the New York Stock Exchange on that date.

‘The new company will have a more diverse production portfolio, with mining operations on four continents, and with a good mix of deep-level, shallow and open-pit operations. This should reduce our cost of capital. Importantly, following completion of the merger, the free float of AngloGold shares will almost double which should considerably enhance trading liquidity in Johannesburg, New York and, significantly, on the Australian Stock Exchange. The transaction will also lift AngloGold’s market capitalisation to approximately US$5.5 billion,’ said Bobby Godsell, Chairman and Chief Executive Officer of AngloGold.

Normandy is Australia’s leading gold producer and the world’s seventh largest gold producer. For the year ended 30 June 2001, Normandy produced 2.3 million ounces at a cash cost of US$162 per ounce and had reserves of approximately 26.4 million ounces.

Normandy owns many gold properties in Australia, including a 50% interest in the Super Pit, near Kalgoorlie, in Western Australia, a 50% interest in the Pajingo mine in Queensland, 87.5% of the Tanami operations in the Northern Territory, the Yandal operations in Western Australia and a 44.44% interest in the Boddington gold operations in Western Australia (in a joint venture with AngloGold).

Additionally, Normandy owns a number of assets outside Australia including the Midas (Ken Snyder) mine in Nevada in the US. It also has a 49.9% interest in TVX Normandy Americas, which has interests in five mines in North and South America.

AngloGold’s existing portfolio includes operations such as Great Noligwa, TauTona and Kopanang in South Africa, Geita in Tanzania, Morila in Mali and Sunrise Dam in Western Australia, low-cost producers in Brazil and Argentina and a major expansion project in the Cripple Creek & Victor joint venture in Colorado.

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