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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (40082)	6/15/2000 5:40:00 PM
From: Lucretius	Respond to of 42523

LOL.. wouldn't that be appropriate.. LOL

To: pater tenebrarum who wrote (40082)	6/15/2000 5:44:00 PM
From: Lucretius	Read Replies (1) \| Respond to of 42523

when's the NYA going to break out.. i am tiring of waiting....

To: pater tenebrarum who wrote (40082)	6/15/2000 5:45:00 PM
From: re3	Read Replies (1) \| Respond to of 42523

from the globe and mail, commentary on the merger, note the remark 'five bagger' ho ho ho !!! Miners see merger creating $3.5-billion firm by Allan Robinson - Wednesday, June 14, 2000 They have little in common, but Franco-Nevada Mining Corp. and Gold Fields Ltd. are betting that a merger will create a new $3.5-billion (U.S.) giant that will solve problems for each of them. Seymour Schulich, chairman of Franco-Nevada, a Toronto-based gold royalty company, said that there were no available royalty deals of the size the company needs. "We had a billion-dollar trawler in the lake and we had fished all of the lake," he said. Likewise, Gold Fields chairman and chief executive officer Christopher Thompson complained that investors undervalued its mature South African gold mines and its 71 per cent owned Tarkwa mine in Ghana. The company produces over four million ounces of gold a year, making it the world's third-largest gold mining company. However, there is "little or no prospect of starting new mines in South Africa," Mr. Thompson said. The share-exchange merger with Franco-Nevada, announced yesterday, provides Gold Fields with North American assets, as well as a strong financial base to expand globally while sidestepping South Africa's currency exchange controls. The shareholders of each company will end up holding 50 per cent of the new firm. Franco-Nevada has about $700-million in cash and marketable securities and it is debt free. It operates the Ken Snyder gold mine in Nevada, which produces 230,000 ounces of gold, and it owns gold royalties on properties in the United States, Canada and Australia. The deal blends the mine operating skills of Gold Fields with the deal-making abilities of Franco-Nevada, officials of both companies said. Franco-Nevada has a market capitalization of $1.8-billion, and Gold Fields has a market value of $1.7-billion. The new company will be called Gold Fields International, and will be incorporated in Canada. It plans to pay out 50 per cent of its profit as dividends. It will also seek a listing on the New York Stock Exchange. For Mr. Schulich and Pierre Lassonde, president of Franco-Nevada, the merger represents a bet on the price of gold and the belief that Gold Fields is among the companies which would benefit most from its rise. "We did the deal for one reason," Mr. Schulich said. "We think at $400 [an ounce] gold [prices], this company is a five-bagger. We think we are are going to make a tonne of money." Gold traded yesterday at $285.50 an ounce. Mr. Schulich and Mr. Lassonde, who are the co-founders of Franco-Nevada, have a total investment of $280-million (Canadian) in the firm. "We are out to make a billion," Mr. Schulich said. He points out that with every $25 (U.S.) increase in the price of gold, the new company's pre-tax cash flow will increase by almost 30 per cent or $110-million. Mr. Schulich also said that he regards royalties that Franco-Nevada owns in diamonds, oil and gas -- as well as its investment in the Voisey's Bay nickel project in Labrador -- as non-core assets that could be sold. But one gold mining industry observer -- and a movie and television buff -- put a different slant on the merger proposal. For Gold Fields it represents "Out of Africa," and for Franco-Nevada it's "Fantasy Island," as it expects that gold might go to $400 an ounce, he said. Catherine Gignac, a gold mining analyst with Bunting Warburg Dillon Read Inc., said that the merger reflects the need for gold mining companies to be large enough to appear on the radar screens of institutional investors around the world. Franco-Nevada is also showing a willingness to accept more risk by acquiring an interest in South Africa's deep gold mines. "The technical risks are huge relative to North American mines," Ms. Gignac said. Longer-term, mining analysts say the merger could represent the beginning of an exit strategy for Franco-Nevada's co-founders. Mr. Schulich told analysts yesterday that he had "no near-term intention" of selling any shares of Franco-Nevada. Mr. Schulich and Mr. Lassonde will be co-chairmen of the new company. In addition, they have signed three-year management contracts. Mr. Thompson will be president and CEO. "I'm 60 years old and in three years I want to look at things," Mr. Schulich said. Mr. Lassonde was not available for comment. The shares of Franco-Nevada fell $1 (Canadian) yesterday to $16 on the Toronto Stock Exchange. The shares of Gold Fields, which trade on the Nasdaq Stock Market, fell 25 cents (U.S.) to $3.81. Under the terms of the merger agreement, shareholders of Gold Fields will receive 0.35 shares of Franco-Nevada for each Gold Fields common share, resulting in the issue of approximately 159 million Franco-Nevada common shares. The merged company would have earned $154-million on revenue of $1.3-billion if the two firms had been merged in the latest fiscal year. The cash flow would have been $277-million. The company hopes shareholders will vote to approve the merger in August.