I found this article, about Kinross buying Echo Bay, TVX.:
Kinross Gold buying Echo Bay, TVX
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 4:13 PM ET June 10, 2002
TORONTO (CBS.MW) - Kinross Gold said Monday it's buying Echo Bay Mines, TVX Gold and part of a Newmont Mining joint venture for $1.7 billion to create one of the world's 10 largest gold producers.
Shares of Kinross Gold (KGC: news, chart, profile) were down 21 percent to $2.02 and Echo Bay (ECO: news, chart, profile) plunged by 17 percent to 99 cents. TVX (TVX: news, chart, profile) added 15 percent to $1.21.
"Assets are going to be king in the secular recovery of the industry," said Kinross Gold CEO Bob Buchan, in a conference call with analysts. Buchan will lead management of the new company.
"TVX, standalone, was too small" in a consolidating industry, said TVX CEO Sean Harvey.
The combination will create a company with $2.3 billion in market capitalization and production capacity of two million ounces a year with total cash costs of less than $200 per ounce. Sixty-five percent of its production is in the U.S. and Canada.
The new company will be the only main North American primary producer with a non-hedging policy and less than 5 percent of reserves hedged.
It will have the highest leverage to gold prices among major North American producers, benefiting from what many analysts say is a continuing bull market in the precious metal.
Under the deal, shareholders of Echo Bay will receive 0.52 of a Kinross share for each of their shares, while TVX stockholders will get 0.65 of a Kinross share for each TVX share they exchange.
The deal also calls for the 49.9 percent purchase of TVX Newmont Americas, a joint venture owned by major gold producer Newmont Mining (NEM: news, chart, profile).
Newmont Mining not only agreed to sell part of TVX Newmont to the new triad but also said it would vote its 45.2 percent stake in Echo Bay to support the merger. Newmont Mining has been evaluating its non-core assets as it sought to cut net debt to less than 20 percent of total capitalization by the end of the year.
The transaction, which is expected to close in fourth quarter of 2002, requires shareholder and regulatory approvals.
The new company will apply for listing on the New York Stock Exchange. |
