Barrick makes £250m approach for European Goldfields
By David Robertson
BARRICK GOLD, the world’s largest producer of the precious metal, has made a £250 million takeover approach to European Goldfields, The Times has learnt.
The offer is understood to be one of several that European Goldfields, which is listed in London, has received in recent months.
The company, which has a mine in production in Greece and three others in development, has rebuffed the approaches, saying that it is currently being undervalued.
With the large goldminers struggling to find sufficient new reserves to replace existing production, small and medium-sized miners are becoming targets.
European Goldfields is attractive because its exploration work has just started to generate earnings for the company. The company reported its third quarter results yesterday, with a profit before tax of $5.4 million (£2.8 million) in the first nine months of this year, compared with a loss of $8.7 million last year.
Despite this, the company’s share price has dropped from 217p in April to 193½p yesterday.
David Reading, the chief executive, says that he believes this undervalues the company and that he is hoping to hold off predators until at least next year.
Mr Reading says that he believes European Goldfields will see its share price take off after Greek authorities give it the environmental permits required to open its second mine in the country. This is expected to happen next June or July. European Goldfields is also conducting feasibility studies into opening two other mines, one in Greece and one in Romania.
Mr Reading said yesterday: “The real value of this company is not just in the mine we have operating now but also these other big projects that we are going to develop in Greece and Romania.”
timesonline.co.uk
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