Interesting reading:
Thursday January 14, 9:04 pm Eastern Time
Argentina Gold raises stakes in battle with Barrick
By Paul Simao
TORONTO, Jan 14 (Reuters) - High-flying Canadian gold miner Argentina Gold Corp.
(Vancouver:ARP.V - news) released on Thursday a new set of drill results in an effort to
galvanize shareholder resistance to a hostile takeover by rival Barrick Gold Corp. (Toronto:ABX.TO - news).
Argentina Gold, one of the hottest mining stocks on the tiny Vancouver Stock Exchange during the past three months, said the
results confirmed much larger gold and silver reserves at the prized Veladero mine located in northwestern Argentina than had
estimated previously.
The company earlier had estimated the mine contained about 4.5 million ounces of gold and 119 million ounces of silver.
''Veladero is well on the way to being established as multi-million ounce, world-class deposit and has opened the Valle de
Cura region in Argentina as one of the most important new gold exploration areas in the world,'' Argentina Gold President
Patricio Jones said in a press release.
Jones later told reporters and analysts during a conference call that Veladero could ultimately yield 20 million ounces of gold.
Argentina Gold has already discovered a deposit estimated at two million ounces of gold and 70 million ounces of silver at the
nearby Filo Federico zone, but the grade of that deposit is considered too low to recover economically.
The new results could force Barrick to sweeten its C$1.42-million, or C$4.00-a-share, takeover bid.
Argentina Gold shares closed down C$0.08 at C$4.80 a share on Thursday on the VSE.
Toronto-based Barrick, which already owns a 40-percent share in the mine and operates the Pascua gold property six
kilometers (3.8 miles) away, described its surprise offer in December as a good fit for both companies.
Argentina Gold quickly spurned that offer as ''inadequate, opportunistic and coercive'' and advised its shareholders not to
tender their shares.
Argentina Gold Director Lukas Lundin said on Thursday that the Veladero project was worth ''substantially more than the
current Barrick bid'' and was viable as a stand-alone operation independent of the nearby Pascua development.
Although Barrick has extended its offer to January 19, Argentina Gold said it would continue to expand drilling at Veladero and
solicit other offers from rival mining companies.
Analysts had speculated that Denver-based Newmont Mining Corp. (NYSE:NEM - news), which already owns 2.5 million
Argentina Gold shares and has extensive land holdings near Veladero, might swagger up to the table with a better offer.
''We have a number of companies looking at the project right now, but I can't guarantee a follow-up offer right now. That is
what we are working on very hard,'' Lundin told reporters and analysts.
Argentina Gold said it had appointed Canada's ScotiaMcLeod Inc. as its financial advisor to help consider all future bids for the
company. |
