Argentina Gold in the News??
canoe.ca
Saturday, January 2, 1999
Argentina Gold hopes for Newmont
proposal bid
Vancouver junior wants an option to Barrick's bid
By Paul Bagnell
The Financial Post
Argentina Gold Corp. is trying to persuade Denver-based Newmont Mining Corp. to
make a friendly, all-stock offer for it as an alternative to a $4-a-share hostile bid from
Barrick Gold Corp.
Bill Rand, chairman of a committee of independent Argentina directors formed to
study Barrick's offer, said Argentina expects an answer from Newmont before the Jan.
9 deadline set by Barrick for shareholders to make up their minds on its offer.
"We would hope to have them make a takeover bid by way of a plan of
arrangement," Mr. Rand said. "We know they are discussing the topic, but we haven't
had any proposal from them.
Argentina, a Vancouver-based exploration junior with a promising gold discovery in
Argentina, has rejected two takeover offers from Barrick. The first was a friendly
$5.50-a-share offer -- dependent on Argentina management agreeing to a lockup
agreement with Barrick. The second bid of $4 was launched when talks toward an
agreement failed.
Shares of Argentina closed Thursday at $5, down 10¢. They traded at $2.96 the day
before the rejected $5.50 offer became public, and have averaged $5.30 since.
Mr. Rand said Argentina has signed confidentiality agreements with Newmont and
three other gold mining companies, two of which have expressed interest since
Barrick's plans become known on Dec. 8.
The plan being discussed with Newmont would likely see Newmont set up a
Canadian subsidiary, then offer shares of the Canadian unit for shares of Argentina,
Mr. Rand said. "We're looking to get the highest bid," he said. "We're happy to take
paper in Newmont or any other large mining company that is interested. "
But mining analysts said Argentina has a tough task ahead of it in fending off Barrick's
bid.
Argentina and Barrick are partners in the Veladero gold exploration project in
western Argentina near the border with Chile. Argentina owns 60% of the project and
Barrick holds 40%. Argentina says the property holds an unproven resource of 4.46
million ounces of gold and 118.9 million ounces of silver.
More significantly, however, Barrick's Pascua deposit, which the company says
contains at least 11 million ounces of proven gold reserves, lies just six kilometres
away from Veladero, in Chile.
John Kaiser, publisher of the Kaiser Bottom Fishing Report, a San Francisco-based
newsletter on junior exploration companies, said Barrick, now getting ready to
develop the Pascua deposit, has a host of financial and operating advantages other
major miners lack.
Russ Cranswick, an analyst at Research Capital Corp. in Vancouver, said
Argentina's management hasn't given shareholders strong reasons to refuse Barrick's
offer. "To go up against Barrick in its own backyard, [Newmont] would have to have
pretty compelling reasons."
Based on exploration results released so far, he said, the Veladero property is worth
less than the $4 Barrick is offering.
With regards,Frank
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