Monday, 21st November 2005 (2986 views)

South African gold mining giant Gold Fields has snapped up the 89 per cent stake it did not already own in Canada-based rival Bolivar for $330 million.

The all-cash move will reduce the world's fourth largest mining company's exposure to the tricky South African market.

Gold Fields, which has an annual production of 4.2 million ounces of gold, said the deal would help it achieve its goal of producing a further 1.5 million ounces by 2009.

Bolivar owns a gold mine in Venezuela.

Bolivar shareholders cheered the move as the company's shares hiked 14 per cent, while management took the move as a vote of confidence for Venezuela's gold prospects.

"This transaction validates Venezuela as a favourable place to do business and we are confident that Gold Fields' involvement will contribute positively to the development of its mining industry," stated Bolivar's CEO Serafino Iacono.

A number of South African mining companies have moved to reduce commitment to the domestic market over recent years due to the strength of the rand.

The currency has gained 80 per cent on the dollar in four years, meaning local outfits have been saddled with high costs while battling against lower selling prices.

 

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