I guess there will only be maybe 5 left in the world.:3
CSFB ups Normandy rating on merger talk
SYDNEY, Dec 9 (Reuters) - Credit Suisse First Boston upgraded its recommendation for Normandy Mining Ltd to ''buy'' from ''hold,'' citing compelling reasons for a merger with Homestake Mining Co (NYSE:HM - news) and a rise in net present value, CSFB analyst Michael Slifirski said on Wednesday.
''We have upgraded our Normandy recommendation from hold to buy based on the 12 percent increase in our NPV and the strong differential pricing between Normandy's investment fundamentals and those of the North American gold sector,'' Slifirski said in a report.
''We can identify compelling reasons for a merger between Homestake and Normandy and believe that corporate activity is inevitable,'' he said.
Normandy shares gained nearly five percent on Wednesday to close up seven cents at A$1.57, on heavy turnover of more than nine million shares. It ended day with a market capitalisation of A$2.67 billion, based on 1.69 billion shares outstanding.
''Normandy is now an attractive acquisition for Homestake,'' Slifirski said.
Normandy is Australia's largest gold miner, producing 1.73 million ounces in 1997/98. Homestake's yield in calendar 1997 was 2.544 million ounces.
Normandy and Homestake each own 50 percent of Kalgoorlie Consolidated Gold Mines Ltd, which operates the giant Super Pit lode in the Western Australia goldfields and the nearby Mount Charlotte mine.
''A single owner of this asset is logical,'' Slifirski said.
Any merger could also include Joseph Gutnick's Great Central Mines Ltd , 27.5 percent owned by Normandy and actively mining the rich Bronzewing and Jundee lodes in the Yandel Belt of Western Australia.
At Great Central's recent share price of A$1.20, Homestake could offer scrip at twice the price, Slifirski said.
Great Central closed five cents lower at A$1.15. |
