Barrick bietet 9.2 Mrd. $ für Placer Dome

http://biz.yahoo.com/bw/051031/315447.html?.v=1

Die Konsolidierung der grossen Produzenten scheint beinahe am Ende - Dennoch ist somit keine neue Unze ersetzt worden.... Hmm!

There is a very limited amount of players around after the consolidation was ongoing for several years already.

We're already in the top producers - not much choice from here on out!

Cheers - frr

As an afterthought - both are clearly top hedgers. Are they hurtin'?

Oder war diese Vermählung von JPM, GS, DB und UBS angedacht?

Go figure ... frr

Scheint immer mehr zum Duell einbeiniger hundert Meter Läufer zu werden. Hedging may be toxic to your health - especially when you can't make a penny on producing the stuff.

GG - könnte der grosse Gewinner sein... doch schaut mal was deren Ex-Chef macht ... Ha ... A ha und Nevada...

NEW YORK -- A $9 billion deal that would create the world's largest
gold company could ignite a rush of takeovers, as smaller companies
struggle with high mining costs that eat into profit margins,
analysts and industry observers said on Monday.

"I expect this will continue as it's the best way for companies to
build up reserves, by buying other mining companies," said Peter
Schiff, chief executive of brokerage Euro Pacific Capital Inc. of
Newport Beach, California.

"I don't think this is the end of consolidation. Bigger companies
will buy juniors; it's easier to buy reserves on Wall Street," said
Schiff, who manages approximately $400 million of investments,
including 10 percent in gold mining stocks.

His comments came after Canada's Barrick Gold Corp. bid $9.2 billion
in cash and stock to acquire another Canadian miner, Placer Dome
Inc..

Successful completion would catapult Barrick -- already Canada's
biggest gold miner and the world's third largest -- ahead of Denver-
based Newmont Mining Corp. and South Africa's AngloGold Ashanti Ltd.
in world rankings. Placer is the world's No. 5.

The announcement comes at a time when the industry is struggling
with higher exploration and mining expenditures, brought on by sky-
high energy costs. Meanwhile, the gold price hit an 18-year high
around $480 per ounce earlier this month -- although it has slipped
since, with the spot price in New York down below $466 from Friday's
$473.

Asked if the Barrick-Placer Dome deal would spark a wave of
consolidation, Peter Spina, an industry observer who runs the
precious metals Web site Goldseek.com, said: "Absolutely.

"It's surprising there have not been more. I expect some other
bidders to come into the picture," he said. "Big companies are
looking to consolidate and there are not many big players."

Both AngloGold and Newmont declined to comment on whether they were
interested in Placer Dome or future acquisitions of smaller miners,
the so-called "juniors."

"Placer Dome has been a possible takeover target for some years; and
I don't know whether Newmont or AngloGold will get into a battle,
but there's certainly a possibility," said analyst David Davis at
Andisa Securities in Johannesburg.

"(But) Barrick will probably only keep the core assets it wants and
spin off the rest of them."

Before the deal was announced, Harmony Gold Mining Co. Ltd. Chief
Executive Bernard Swanepoel commented on mergers in general. "The
rate of depletion plus the rate of declassifying reserves back to
resources far outstrips the rate of discovery.

"For companies which all have to justify their share prices partly
through being growth stories, to me it sounds inevitable that
corporate activity will take place."

Goldseek.com's Spina said the rising cost of mining the Earth's gold
deposits was crucial. "Companies are forced to go after others to
build their resource base.

"If you look at the valuation of the juniors, they have been
devastated in the last two years." Their market valuations are down
as much as 90 percent, he said.

"Also, in the gold market, the price has gone up, but so have costs.
These companies have not been able to raise capital," said Spina. "I
believe in the next year when the price heats up, there will be more
interest. This market has more potential to the upside."

"Most companies have not invested as much in exploration as they
should because of (previously) low gold prices and the increased
cost of mining," said Euro Pacific's Schiff. "Prices need to rise
substantially, and in my mind will go a lot higher."

Schiff, who owns some $600,000 of Barrick stock and $300,000 of
Placer Dome shares, said he was talking about gold in the range of
$2,000-$4,000 per ounce.

Frank Holmes, chairman and CEO of U.S. Global Investors, said the
deal highlights mining companies combining to share costs. He cited
the recent friendly deal in Canada in which Inco Ltd. agreed to
acquire rival nickel miner Falconbridge Ltd..

"Already we are seeing several mining companies sharing heavy
equipment costs. Barrick could save $200 million, so there's
probably a lot of synergies," said Holmes, whose $2.6 billion mutual
fund in San Antonio, Texas, is approximately 20 percent invested in
gold and mining stocks.

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and how the CB's figure to avoid a short squeeze - again via GATA:

From: "cxpowell" <gatacomm@...>
Date: Tue Nov 1, 2005 1:04 am
Subject: Is Barrick's bid for Placer meant to turn another big hedge book 'evergreen'? cxpowell
Offline
Send Email

7:57p ET Monday, October 31, 2005

Dear Friend of GATA and Gold:

The Reuters dispatch below seems to be the first news
service story that recognizes the importance of hedging
-- sales of borrowed gold -- in regard to Barrick Gold's
proposal to acquire Placer Dome. But the Reuters story
doesn't quite reach the insight about the proposal that
was offered tonight by GATA Chairman Bill Murphy in his
"Midas" commentary at LeMetropoleCafe.com and by Tan
Range Exploration CEO Jim Sinclair in his commentary at
his Internet site, JSMineset.com.

While Barrick's bid for Placer Dome is said to be
unsolicited or hostile, Placer Dome is, like Barrick, a
major hedger, except that it lacks what Barrick has called
its own "evergreen" gold hedging arrangements. That is,
Barrick has boasted of its ability to borrow virtually
unlimited amounts of gold inexpensively for 15-year terms
that can be renewed every year so that, in effect, the
gold never really has to be repaid.

Like Blanchard & Co., whose lawsuit in U.S. District Court
in New Orleans has charged Barrick with rigging the gold
market, GATA has surmised that Barrick's virtually infinite
supplies of gold come from central banks via Barrick's
bullion bank, J.P. Morgan Chase. (For who else but central
banks has that much gold to "lend"?) Indeed, seeking
dismissal of the Blanchard lawsuit, Barrick filed a motion
in court confirming as much -- claiming, in effect, that
it is the agent of the central banks in regulating the gold
price, and that, since the central banks have sovereign
immunity against suit, that immunity should extend to
Barrick itself as their agent:

http://www.lemetropolecafe.com…03/memoformotiontodis.pdf

If Barrick acquires Placer Dome, presumably Placer's
hedging liabilities will be covered by the "evergreen"
provisions of Barrick's hedging arrangements with the
central banks via Morgan Chase, and thus the danger of
a short squeeze against Placer's hedging will be
eliminated.

Like the Bank of England's series of gold sales begun
in 1999 and the Washington Agreement on Gold signed
by the European central banks that year and renewed
this year, Barrick's acquisition of Placer Dome can
be seen as part of a central bank scheme to rescue
all large private parties that are short gold, a
scheme accomplished at a heavy public cost -- the
discounted dishoarding of the various national
patrimonies.

If this indeed is the central bank scheme, it means
that the gold price is not likely to rise abruptly or
rapidly, as many gold bugs dream -- and, indeed, the
gold price has not done so. But it also would mean
that the central banks are attempting a controlled
retreat with gold, and a retreat that is not without
danger.

The five-year chart of the gold price that is
accessible on the link displayed halfway down the
right side of the home page at Kitco --

http://www.kitco.com/

-- tends to confirm this. For the chart shows a rising
30-degree angle and an average annual gain for gold
of about 15 percent over five years.

As with everything else really important done by
central banking, no one is supposed to notice this,
for once the central banks' scheme is understood,
the market may become less cooperative with their
market rigging; the market may rediscover the only
sure thing: gold.

So GATA will continue to try to help people notice.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Barrick Bid Seen Bullish for Gold Price

By Zach Howard
Reuters
Monday, October 31, 2005

http://biz.yahoo.com/rb/051031…ls_gold_barrick.html?.v=1

NEW YORK -- A potential deal combining Barrick Gold with Canadian
competitor Placer Dome may offer support to gold prices due to
increased de-hedging and it should not dramatically affect the
outlook for production, metals analysts said on Monday.

Gold sources felt that joining the two firms who have long used
forward sales and/or options to lock in prices of unmined gold would
probably mean a bit less hedging in the market.

The combined firm likely would have more cash flow and would better
be able to more aggressively roll out of the hedges they have, which
could lift gold's price, the analysts said.

"It could potentially have a small, short-term impact on gold,
depending on what they decide to do with the hedging within Placer
Dome," said Victor Flores, a mining analyst at HSBC in New York.

"That should be positive for prices because I don't think Placer
Dome has been very pro-active on the de-hedging front," said another
gold analyst, based in Canada, who declined to be named.

Hedging protects producers in times of low gold prices as they lock
in better prices for their metal, but it prevents those miners from
fully enjoying a rally if contracted prices are cheap relative to
current prices.

Barrick, recently the owner of the industry's biggest gold hedge
book, said Monday it began an unsolicited $9.2 billion bid for
Placer Dome -- historically also a large hedger -- in a deal that
would create the world's biggest gold miner.

The announcement was notable as gold holds near a recent 18-year
high due to strong investment and jewelry demand.

It also comes at a time when the industry is struggling with higher
exploration and mining expenditures, brought on by lofty energy
costs.

A successful takeover would boost Barrick -- already Canada's
biggest gold miner and the world's No. 3 -- ahead of U.S.-based
Newmont Mining Corp. and South Africa's AngloGold Ashanti Ltd.
(ANGJ.J) in world rankings. Placer is the world's No. 5.

Barrick said a deal with Placer Dome would produce 8.3 million to
8.4 million ounces of gold a year, and would mean spinning off a
sale of several mines to fellow miner Goldcorp.

One market watcher said the Barrick/Placer news was bullish for
gold, in part because it seemed to show Barrick was betting the
metal's price would remain strong.

Barrick offered $20.50 a share for Placer, a 24 percent premium over
the prior closing price in New York on Friday.

"With gold still around an 18-year high, Barrick offering a 24-
percent premium for Placer Dome is definitely a bullish indicator
that the price is going to continue to rise," said Emanuel Balarie,
senior market strategist at Wisdom Financial Inc. in Newport Beach,
California.

If the Barrick/Placer deal goes through, production plans of the two
miners probably would not be sharply affected by the consolidation,
however, the analysts said.

"It could mean a little bit of a slowdown of the expansion of growth
production because you'd have one management moving those projects
forward rather than two," said Jeffrey Christian, managing director
of precious metals consultant CPM Group. "But I'm not even sure that
you'd see that.

"I think those two companies have relatively like-minded management,
so my thinking would be that there would be little change -- less
change between those two companies than there would be with others,"
he said.

Last year, the world's sixth biggest producer, Harmony Gold,
launched a hostile takeover bid for rival Gold Fields but the offer
failed.

Traders said on Monday they initially thought gold might jump up on
the news, but fund selling later hit the market on concerns about it
being steeply overbought at current levels.

Benchmark gold futures in New York ultimately ended 1.7 percent
lower at $466.90 an ounce on Monday.

----------------------------------------------------

Ich meine was immer Barrick angreift hinterlässt einen bitteren, üblen Nachgeschmack! Es ist schon seit langem klar, dass Barrick von JPMC im Sinne der CB's und anderer Bullion Banken kontrolliert wird. Quasi eine Versicherung gegen explosivem Goldpreis. Barrick und nun auch Placer sind anti Gold. Fehlt nur noch Anglo zum dreckigem Viertel-Dutzend.

Grüsse

bringt Newmont ins Spiel via vis Placer Übernahme. Kann mir nicht vorstellen, dass Lassonde ein Hedgebuch von Placers Grössenordnung übernimmt. hatten dieses Problem schon einmal mit Newcrest.All Eyes on Newmont in Latest Gold Rush

By Andy Hoffman
The Globe and Mail, Toronto
Wednesday, November 2, 2005

http://www.theglobeandmail.com…leNews/TPStory/LAC/200511
02/RNEWMONT02/TPBusiness/Canadian

Newmont Mining Corp.'s next move may very well depend on how much
size matters to its Canadian-born president, Pierre Lassonde.

If successful, Barrick Gold Corp.'s $9.2-billion (U.S.) hostile bid
for Vancouver's Placer Dome Inc. would topple Denver-based Newmont's
hold on the title of world's top gold producer.

Analysts say it's a mantle Newmont and Mr. Lassonde may not want to
give up.

"It's kind of the industry's dirty little secret," said Victor
Flores, an analyst with HSBC Securities. "They all talk about
wanting to be the most profitable, but boy, do they all want to be
the biggest."

Newmont became the world's biggest gold company in 2001 with a $4.2-
billion, three-way merger between Australia's Normandy Mining Ltd.
and Canada's Franco-Nevada Mining Corp. Mr. Lassonde co-founded
Franco-Nevada with long-time business partner Seymour Schulich in
1982.

Mr. Schulich has stepped away from day-to-day operations of the
company but remains on Newmont's board. Mr. Lassonde, meanwhile, is
responsible for much of its strategy and operations along with
chairman and chief executive officer Wayne Murdy.

Sources say the company has hired investment bankers to explore the
possibility of a bid. Calls to Mr. Lassonde's officer in Denver were
not returned. A company official said the company does not comment
on merger and acquisition activity in the sector.

"I think Newmont is probably bothered a bit because they enjoyed
being at the front of the line," said John Embry, Sprott Securities'
chief investment strategist.

Gold industry players point to Newmont as the most likely company to
step up with a counter-bid for Placer. They say it could achieve
cost savings similar to the ones expected by Barrick by combining
Newmont's existing operations in Nevada and Australia with Placer's.

Newmont, however, is unlikely to be interested in all of Placer's
operations, particularly those in Africa. If Newmont were to decide
to launch a competing bid, analysts said it would likely be done in
conjunction with other producers, such as Kinross Gold Corp. of
Toronto and South Africa's Gold Fields Ltd. "I suspect they might
need some help," said Michael Fowler, an analyst at Desjardins
Securities.

Barrick's offer contains a similar arrangement. Toronto-based
Goldcorp Inc. has agreed to pay Barrick $1.35-billion in cash for
several of Placer's mining assets if Barrick succeeds in its
takeover bid.

J.P. Morgan analyst John Bridges said Newmont is "the obvious and
quite possibly the only company that could take on the
[Barrick/Goldcorp] group."

He also suggested a Newmont counter-bid would likely include side
deals to sell some Placer assets. Mr. Bridges pointed to Kinross,
AngloGold Ashanti Ltd. of South Africa, or BHP Billiton Ltd. of
Australia as possible Newmont partners.

"[Newmont's] management group in Nevada could probably take control
of Placer's Nevada assets without pausing for breath. The Australian
assets could be a useful fit. But Newmont would probably be less
interested in the East and South African assets."

Analysts doubted Newmont would have trouble raising capital.

"I think they could draw on the market if they wanted to," said Mark
Smith of Dundee Securities. He said a Newmont bid would likely
include a stock and cash component, similar to the Barrick offer.

"They are larger than Barrick and they certainly have the financial
means to take on Barrick," Mr. Flores said, adding that Newmont was
sitting on roughly $2-billion in cash and liquid assets at the end
of the third quarter.

With the bidding starting at $9.2-billion for Placer, some industry
players question whether Newmont could achieve enough cost savings
to make a bid worthwhile.

"I don't think they'd do anything stupid," Mr. Embry said. "One
thing about Pierre and Seymour -- they made their living by buying
smart. They like to buy assets on the cheap."