-->Harmony buys 29% WAR stake2006-03-09 22:04:12http://www.news24.com/Images/Photos/20060309205121harmony_logo.jpgHarmony Gold has bought a 29% stake in Western Areas for R900m cash and R1bn debt, Harmony CEO says. Johannesburg - Harmony Gold has bought a 29% stake in Western Areas for R900m cash and R1bn debt, Harmony CEO Bernard Swanepoel told Miningmx on Thursday.
Harmony bought investment manager Allan Gray's 24.5% in Western Areas, with the remainder of the shares being bought on the open market, he said, adding the average price of the transaction was R44 per share.

There are no immediate plans, he said, to increase the stake in Western Areas, which has as its primary asset half of the South Deep joint venture mine it shares with Barrick.

"Western Areas was a value proposition, we liked the price. It was available. On approaching the people they were prepared to sell," he said."We effectively established some decent exposure to a great ore body."

"Having had exposure to an orebody not too dissimilar, and a mining method not too dissimilar, to our own Target mine, we like these types of orebodies," he said.

South Deep is a deep-level mechanised mine. The orebody is seen as one of the last great untapped gold deposits.

In February, South Deep revised its reserve estimate down to 29.3 million ounces from a previously reported 55.6 million ounces. The mine has a 25 year life.

Asked whether Harmony would increase its stake, Swanepoel said:"It is simply premature to comment. We've just built up this stake. We are very happy with this stake.

"We'll engage with the company and see if there's anything we can do. There are no immediate plans to go beyond this," he added.

Harmony has not had any talks with Barrick, which recently acquired Canada's Placer Dome. Placer Dome and Western Areas set up the South Deep joint venture in 1999.

Development of the mine, which is 45km southwest of Johannesburg, was marked by strong differences of opinion between Western Areas management and that of Placer Dome. The project overran on budget and time. - Miningmx