South African Mining Company Buying a Major Gold Reserve

The South African mining company Gold Fields said Monday that it would acquire a 50 percent stake in the South Deep mine in South Africa from Barrick Gold of Toronto in a deal worth more than $1.5 billion.

In addition, Gold Fields said it intended to make an offer for the rest of the mining company Western Areas, which owns the other half of the South Deep mine.

Gold Fields said it had a deal to increase its stake in Western Areas to 34.7 percent and an option to increase its holding to 41 percent. It said it would also make an offer to Western Areas shareholders to buy all outstanding shares in that company. The value of those deals was estimated at about $1 billion.

”South Deep is one of the most significant developing ore bodies in the world,” the chief executive of Gold Fields, Ian D. Cockerill, said in a statement. ”It makes commercial and operational sense for it to be in the Gold Fields stable and, in particular, to be operated as a single unit with our adjacent Kloof Gold Mine.”

Gold Fields will pay $1.2 billion in cash and the remainder in stock for the 50 percent state in South Deep. Under the deal, it is paying $104 an ounce for what analysts describe as one of the crown jewels of South Africa’s gold reserves.

The mine is one of the deepest in the world, with estimated reserves of 29.3 million ounces and a projected life of 70 years. Last year, South Deep produced 460,000 ounces of gold.

The agreement ”” anticipated by industry experts for more than a month ”” will need South African approval and will not close until early 2007.

Gold Fields shares traded in the United States fell $1.42, or 7.2 percent, to $18.18; Barrick shares fell $1.79, or 5.7 percent, to $29.58.