Gold Fields Ltd. (GFI), Africa's second-largest producer of the precious metal, has agreed to purchase a smaller mining company for about GBP28 million to give it access to a project in Mali with a resource of 1.25 million troy ounces.

The deal is part of an ongoing trend of consolidation in Africa's still fragmented mining industry as companies look to bolster reserves or turn to a partner to help fund the development of assets.

The Johannesburg-based company said it has made a recommended offer of 9 pence a share for Glencar Mining PLC (GN2.DB), whose principal asset is the Komana project in southern Mali.

The offer is subject to the acceptance of shareholders representing 80% of Glencar's issued shares, although Gold Fields said it may reduce that to as low as 50%. The purchase would be paid out of existing resources and is expected to close in late September, the company said.

"We like Mali and this acquisition forms part of our strategy to grow our presence and footprint in the West African region," said Nick Holland, chief executive of the South African mining firm.

"The offer fairly values Glencar's existing resource base and exploration upside," he said.

Dublin-headquartered Glencar, which is focused on exploration and gold deposits in west Africa, on July 7 said it had broken off talks with Gold Fields that had been aimed at creating a joint venture on the Komana project.

While large-scale consolidation such as Xstrata PLC's (XTA.LN) rejected nil-premium proposal to combine with rival Anglo American PLC (AAUK) tends to grab headlines, a number of smaller deals are in the works. Randgold Resources Ltd. (GOLD), with the support of AngloGold Ashanti Ltd. (AU), last week made a rival offer for Moto Goldmines Ltd. (MGL.T) in a deal that values the gold exploration firm at about $488 million, more than an earlier agreed bid from Red Back Mining Inc. (RBI.T). At stake is access to one of Africa's largest undeveloped mineral resources, the Moto gold project in the Democratic Republic of Congo.

AngloGold is Africa's largest gold producer.

Elsewhere, Central African Mining & Exploration Co. (CFM.LN) earlier this month said it had received preliminary takeover approaches from unnamed suitors. Aquarius Platinum Ltd. (AQP.AU) is close to finalizing its GBP96 million takeover of smaller Ridge Mining PLC (RDG.LN).

Company Web site: www.goldfields.co.za

www.glencarmining.ie

-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848; robb.stewart@dowjones.com
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