The Penny King's Free and Clear M&A Fund

[thepennyking]

OAO GMK Norilsk Nickel, the world's largest producer of nickel and palladium, bought 20 percent of Gold Fields Ltd. for 7.62 billion South African rand ($1.17 billion) as the Russian mining company develops interests abroad.

Gold Fields, based in Johannesburg, is the world's fourth- largest gold producer. Anglo American Plc of London will make a profit of $480 million on the sale of the stake to Norilsk, the company said in a statement to the Regulatory News Service.

Norilsk Nickel, based in Moscow, became Russia's biggest gold miner after it bought ZAO Polyus in 2002 and is benefiting after nickel prices this year peaked at a 14-year high and platinum surged to a 24-year high. The company mined 25.9 tons of gold in 2003 and plans to quadruple output during the next four or five years.

Norilsk Deputy Chief Executive Leonid Rozhetskin in an e- mailed statement called the transaction an ``excellent investment,'' consistent with its plans to expand in gold mining.

Norilsk shares rose $3, or 4.1 percent, to $76 in Moscow as of 12:19 p.m. The stock has climbed 53 percent over the past six months.

Gold Fields said it has not had any talks with Norilsk representatives.

``We were informed this morning'' of the transaction, said Willie Jacobsz, Gold Fields' spokesman in Johannesburg. ``We haven't met with them. I am sure we will be meeting them.''

Norilsk will seek seats on the Gold Fields board of directors at the annual shareholder meeting, the Russian miner's head of strategy, Christophe Charlier, said in a telephone interview. It has ``high respect'' for Gold Fields' management and ``for now'' doesn't plan to increase the stake in the company, he said.

``We hope this transaction will strengthen the relationship with Gold Fields,'' Charlier said. ``We'll jointly explore opportunities for mining worldwide.''



To contact the reporter on this story:
Antony Sguazzin in the Johannesburg bureau,
or [e-mail]
Vladimir Todres in Moscow at [e-mail].

To contact the editor of this story:
Tim Coulter in London at [e-mail].
Willy Morris in Vienna at [e-mail].
Stephen Farr at [e-mail]