Despite the recent Bre-X catastrophe, and the ensuing perception that most junior golds are 'tainted', and the scary humongous drops in price of most junior golds, not all confidence in the Canadian mining industry is lost. The following article pasted from the Calgary Sun says it all! Normandy Mining of Australia is coming to be listed on the TSE by this October!
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Saturday, June 14, 1997
World's No. 5 gold miner seeks a Toronto
listing
Australia's Normandy Mining says Toronto is replacing London as mining
capital of the world
By PAUL BAGNELL
Mining Reporter The Financial Post
Another big international resource company is heading to the Toronto Stock Exchange, convinced
Toronto has earned its reputation as the "capital" of world mining.
Normandy Mining Ltd. of Australia says it expects to be trading on the exchange by October.
The company is Australia's dominant gold producer and, with a market capitalization of $3 billion, is
the fifth largest publicly traded gold miner in the world, according to the Financial Times index of gold
mines.
Normandy's share of gold production at its 19 mines was about 1.5 million ounces in fiscal 1996
(ended June 30), about 90% of which came from its 15 Australian mines.
The biggest contributors were the KCGM mine, which was responsible for about 320,000 ounces,
and two Big Bell mines, which extracted 219,000 ounces. These operations are in southwestern
Australia.
Through a recent joint venture with the French government, Normandy also has production from
three gold mines in West Africa.
The company now wants to expand into Latin America by striking partnerships with medium-sized
North American miners, said executive chairman Robert Champion de Crespigny on Friday.
"It was very clear to us that Canada was becoming the mining capital of the world, taking over from
London," he said.
The proof, he added is the way Canadian mining finance has withstood the scandal of Bre-X
Minerals Ltd.
"Whether it should have occurred or not is another
thing, but the fact is that this market is still very strong.
You can still raise capital."
The recent initial public offering of Boliden Ltd., a zinc
mining company now shifting its headquarters from
Stockholm to Toronto, is proof, Champion de
Crespigny added. Boliden's Swedish parent, Trelleborg
AB, raised $813 million in an oversubscribed offering,
which closes June 17.
Normandy's headquarters will remain in Adelaide,
Australia, but Champion de Crespigny is convinced the
company needs a Toronto presence. The share price,
which has performed poorly since 1993, is likely to
benefit from a TSE listing.
Over the past five years, Normandy shares (NDY/ASX) have reached a high of A$2.62. That was
in late 1993. On Friday, they closed at A$1.63.
Normandy trades at a significant discount to its peers - companies such as Barrick Gold Corp.,
Placer Dome Inc., Newmont Mining Corp. and Homestake Mining Co., all of which rank ahead of
Normandy in size.
But the Australian miner is not simply chasing higher price-earnings multiples in a TSE listing.
Champion de Crespigny believes that competing with those miners will make his company a better
one.
"But more important to us is that, in Canada, there are a tremendous number of entrepreneurial
companies with ambitions in Latin America like we do," he said.
"We're coming to invest with North Americans, especially Canadians, to get down into Latin
America."
Champion de Crespigny said the company is driven by earnings-per-share, not ounces-of-gold
targets.
Normandy is not interested in "bad" - or expensive - gold ounces.
"I've always thought counting the ounces you produce is a bit like counting the bottles the day after a
party - the important thing is whether you really enjoyed the drink."
In fiscal 1996, the company had a net profit of A$99.4 million (A7› a share) on revenue of A$1.2
billion.
That was up from a year-earlier profit of A$41.1 million (A8›) on revenue of A$1.1 billion.
Normandy has hired Luis Baertl a former senior vice-president at Barrick's Latin American
operations to run an office in Santiago.
It already has properties in Peru, and is looking at Argentina, Chile and Bolivia.
It is scouting out gold properties where production of at least 100,000 ounces a year for 10 years
can be achieved, Champion de Crespigny said.
In Australia, Normandy grew by buying up properties where gold had been discovered but where
production was still years away.
"Our strategy was to dominate the major gold fields."
Early in its history, in the mid-1980s, Normandy became the biggest land owner and gold producer
in Kalgoorlie, Australia's biggest gold field.
It now has that status in each of Australia's three main gold-mining areas.
"It's been very much a strategy to do that - go where gold is," said Champion de Crespigny.
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Two junior golds which bucked the recent downtrend in prices are
GMD(VSE) @ ~$4.40 and FORM(OTC or CDN) @ ~$18.00. Both GMD and FORM maintained their price levels pretty well before, during and after the Bre-X nightmare!!! GMD received a $3.5M financing through a p.p. last week from Altamira, and FORM has been hitting rich pay dirt with a Midas touch ever since March. FORM is planning a 3 for 1 stock split and moving on to the TSE by end of July or in August to make FORM affordable and more liquid. If big time buyers (institutions) pick up the stock, you can imagine where the stock is headed. That GMD was given financing in difficult times as these speaks volumes for GMD!
Just a few days before Bre-X evaporated, I strongly recommended GMD and FORM as alternate investments. Instead of expressing appreciation for my well-meaning and value-oriented posts, some of the Bre-X faithful accused me of being "aggravating" and "inconsiderate" and of spamming. No wonder they were taken to the cleaners!
I am neither a broker nor a stock-hyper. As I said before, I am merely sharing worthwhile info.
Richnorth |
