...Ghana Allows Sale

Accra, Ghana, Jan. 17 (Bloomberg) -- Ashanti Goldfields Co., Africa's No. 4 gold producer, may be a takeover target for South African miners looking to expand abroad, analysts said after a report that Ghana's government may allow a bid for the company.

AngloGold Ltd., the top South African gold company, and second-biggest Gold Fields Ltd. are both likely suitors for Ashanti, which offers $456 million a year worth of output at costs a third below world prices, analysts said. Ghana's government may give up the so-called golden share that entitles it to block an acquisition, the Financial Times of London reported.

``There will be some serious competition for Ashanti,'' said Allan Cooke, an analyst at Rice Rinaldi Securities in Johannesburg. ``AngloGold will take a look and Gold Fields has also been mentioned.''

With gold prices down 20 percent in the last five years, five of the six top producers have sought economies of scale through acquisition over the past year. South African companies have looked for deposits easier to extract than the miles-deep mines they have to dig at home.

Ashanti produces its 1.6 million ounces of gold annually at an average cost of $189 an ounce, according to company reports. Gold traded recently at about $285 an ounce in London.

Ashanti, which nearly went bankrupt in 1999 after it made a wrong-way bet on gold prices, indicated it would welcome the freedom to be acquired.

``We will definitely follow (the FT report) up and make sure we get a direct line to government,'' said Ernest Abankroh, Ashanti's company secretary, in an interview. ``This is a new development.''

Rising Stock

Ashanti shares were up 15 cents, or 3.4 percent, at 4.6 euros in late afternoon trading in Germany. They have jumped 80 percent over the past 12 months, partially on expectations that Ghanaian President John Kufuor, who took power last year, would relinquish the golden share. His predecessor, Jerry Rawlings, blocked a takeover bid by Lonmin Plc, which owns 32 percent of Ashanti.

In addition to the golden share, Ghana's government owns 20 percent of Ashanti.

AngloGold, whose $2.9 billion bid for top Australian gold miner Normandy Mining Ltd. has been bettered by U.S.-based Newmont Mining Corp., is already a partner in Ashanti's second-biggest mine, the Geita complex in Tanzania. Costs there are $140 an ounce, less than AngloGold's average expense of $176 an ounce, the companies have said.

Gold Fields, whose 2000 attempt to take over Canada's Franco- Nevada Mining Corp. was blocked by the South African government, owns the Tarkwa mine in Ghana. Ashanti controls the West African country's biggest mine, the Obuasi site.

Asset Base

Ashanti's ``assets are very good and getting lower-cost,' said Mike Jones, an analyst at Canaccord Capital in London. ``Geita is a remarkable asset and Obuasi is a very solid asset.''

Removal of the golden share could lift Ashanti's U.S. shares to $5.50 from a current price of $4.02, Jones said.

Lonmin has said it is no longer interested in gold and wants to focus on platinum.

Ghana's government will ``not fight Ashanti'' if the company persuades ``public opinion'' a takeover should be allowed, said Jacque Obetsebi-Lamptey, the country's information minister, according to the FT.