World number-four gold miner Gold Fields on Tuesday indicated that no viable alternative has emerged from recent talks and that it continues to pursue other alternatives other than rival Harmony’s offer.
In December, representatives of Gold Fields, Harmony, Mvelaphanda Resources and Russian mining group Norilsk Nickel — which has a 20,03% stake in Gold Fields — met in Moscow to try to find beneficial alternatives for all parties.
The meeting in Moscow was “talks about talks” and an end solution couldn’t have been expected, Harmony marketing director Ferdi Dippenaar said.
It is too soon to have expected a viable solution to emerge, Dippenaar said.
“The positive side of the announcement was that Gold Fields would continue to engage in discussions with Harmony. This is the right thing to do — speak to shareholders like Harmony [11,8% shareholder] and Norilsk,” Dippenaar said.
“We are looking to end the environment of hostility and create a climate where we can sit down and talk about the future,” he added.
Independent alternatives that Gold Fields is understood to be investigating include bringing in a white knight and possible changes to the group’s asset structure, such as gold-mine sales.
Gold Fields has gold mines in South Africa, Ghana and Australia.
Investment banks JP Morgan and Goldman Sachs continue to advise on Gold Fields’ alternatives, including Harmony’s offer, a Gold Fields spokesperson said.
On Gold Fields’ move to find alternatives, Dippenaar said that at this stage there is only one legal offer on the table and that is the Harmony offer.
Gold Fields’ board of directors also called on Harmony to abandon its bid, in order to avoid any further shareholder value destruction.
Gold Fields also termed Harmony’s management approach — the “Harmony way” — as flawed and unsuited for Gold Fields’ South African mines. In South Africa, Gold Fields has three gold mines — Driefontein, Kloof and Beatrix.
“The latest Harmony assertion that continuous operations is the panacea that will save Harmony is now being exposed with the breakdown over the Christmas period of continuous operations at the Free State operations, potentially resulting in significant lost production,” Gold Fields said in a statement.
Last week, the National Union of Mineworkers failed to renew the continuous operations agreement after a year’s duration at it Free Gold operations, which were also the first operations to see continuous operations.
Continuous operations agreements allow Harmony to increase the number of days worked at its mines from 273 days to 353 days, excluding 12 public holidays. — I-Net Bridge