S.Africa gold firms eye Ashanti

By Darren Schuettler

JOHANNESBURG, Oct 21 (Reuters) - South African gold miners are casting acquisitive eyes on troubled Ashanti Goldfields, but analysts on Friday tipped AngloGold as the strongest local suitor for Africa's third-largest gold company.


AngloGold, the world's biggest gold producer, Gold Fields Ltd and Harmony Gold Co are watching the unfolding situation in Ghana where Ashanti's financial woes have put the gold miner in play.


``They all have equal experience, but I think AngloGold has the managers to take on the mine. The other guys are a bit thin on the ground in terms of their number of projects,'' said a senior Johannesburg-based mining analyst.


Ashanti faces hundreds of millions of dollars in paper losses after its hedge book fell deep into the red following a surge in bullion prices in recent weeks.


The government, which holds a veto vote and 20 percent of Ashanti, is considering a bid from 32 percent shareholder Lonmin Plc, but is also open to other offers. Lonmin's bid values the entire company at $665 million.


AngloGold spokesman James Duncan said they had been approached by Ashanti's advisers, but it was too early to say when a decision would be taken.

``Obviously we now have to undergo a thorough information gathering process about the company and its assets,'' Duncan told Reuters.


AngloGold, which produces more than seven million ounces annually, is aggressively pursuing an expansion strategy to broaden its production base into the rest of Africa, the Americas and Australia.


AngloGold's bid for Australia's Acacia Resources received a major boost this week when rival suitor Delta Gold backed away from a bidding war for Acacia.


ASHANTI SEEN SADDLED WITH COSTS


Analysts said Ashanti has a solid ore body, but is saddled with a costly and cumbersome management structure similar to that which afflicted the old South African mining houses before their shakeout a few years ago.


``It's a good quality asset. I think it's just been messed up,'' another analyst said.

Gold Fields, South Africa's second largest gold producer, has not ruled out acquiring more assets in the West African country where it holds a 70 percent stake in the Tarkwa mine.


But Gold Fields Chairman Chris Thompson said he is also looking to gain a foothold outside Africa in Asia, Australia and the Americas.


``We are talking to a lot of people about potential deals. I wouldn't be surprised if we do something in the new year,'' Thompson told delegates to the Denver gold show on Wednesday.


Harmony Gold, South Africa's third largest gold producer, has ruled out a bid for all of Ashanti, but said it may be interested in picking up some of its assets.


``It's well known that we have a growth strategy and of course anything that comes up for sale we would look at closely,'' Harmony Financial Director Frank Abbott told Reuters.