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Gold Fields is the go-to SA gold company - Georges Lequime, RBC
In an interview on Radio 2000 @ 18:50 on Wednesday, 2 August 2006
[miningmx.com] -- GOLD Fields shares are the ones to own if investors want exposure to the strong rand gold price, Georges Lequime from RBC Capital Markets said on Wednesday.
"For our clients it's the go-to South African gold company. It has simple corporate structure, consistent management, there's no hedge book to worry about, it gives you full leverage to the gold price, and there's a little bit of growth coming through," Lequime said on the Moneyweb Power Hour weeknightly radio show.
The dollar gold price rose 14% in dollar terms but 17% in rand terms in the June quarter.
"If you want to play South Africa and participate in the rising rand gold price it's a very good company to own," Lequime said.
Western Areas, which has as its sole operating asset a 50% stake in the South Deep gold mine with Barrick, is likely to stay within quite a narrow band of between
R38 and upper R40s because of pending corporate action.
Gold Fields and Harmony Gold both own major stakes in the company. Harmony has said it wanted to reverse some of its quality assets into the company, but there are worries that those plans might be thwarted by Gold Fields, which was the subject of a hostile bid by Harmony a couple of years ago.
"I'm not sure what Harmony's next move is. It's going to be difficult for them to go ahead with their plans they have with Western Areas with Gold Fields as a major shareholder," Lequime said.
"I think we're in bit of a stalemate on Western Areas shares and will be caught up in that band for a while," he said.
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