MARC HASENFUSS: Gold north, but cabling goes south
Gold Fields expands in Australia, Harmony cashes in on gold highs, and SOH fights weak margins as cheap imports surge
At the time of writing, the gold price was ascending again, up more than 5% to $3,381. This price scurry was well timed for Gold Fields — which confirmed it would be taking out Australia-based Gold Road Resources in a premium-priced deal valued at about R44bn.
It’s a sizeable transaction, representing about 12% of Gold Fields’ market value on the JSE. I have spoken before — slightly warily — about commodity counters’ capital allocation at the top of a cycle, and I suppose one might question whether Gold Fields might be better off capitalising on generating strong cash flows from its current portfolio to pay bumper dividends...
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