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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: gold$10k who wrote (72518)	6/27/2001 8:28:54 PM
From: Stephen O	Read Replies (1) \| Respond to of 116764

Franco-Nevada says more gold mergers to come 6/27/2001 7:23:00 PM By Scott Anderson TORONTO, June 27 (Reuters) - The gold mining industry, still buzzing over the blockbuster merger between Barrick Gold Corp. (ABX) (ABX) and Homestake Mining Co. (HM) will see more action in the months ahead as big players seek to solidify their strongholds, top executives at Franco-Nevada Mining Corp. Ltd. (FN) said on Wednesday. And Franco-Nevada, already no stranger to the merger game, will be very active over the next few months. "We're not through goosing the industry. Not by a long shot," Seymour Schulich, chairman and co-chief executive, told Reuters in an interview. "We started the game a year ago and we're still at the forefront. I think it will heat up, no question," added Pierre Lassonde, president and co-chief executive. Franco-Nevada's statements come just days after rival Canadian gold company Barrick catapulted to the position of the world's second-largest gold producer behind South Africa's AngloGold Ltd. (ANGJ) through the $2.3 billion all-share takeover of Homestake. The deal, expected to be finalized in the fourth quarter, boosts Barrick's production by more than 2 million ounces a year to 6 million ounces. Franco-Nevada, a gold royalty company, has also pulled the trigger on a handful of blockbuster deals in the past year, some successful, some not. In April, the company struck an agreement with Normandy Mining Ltd. (NDY) to swap Franco-Nevada's Ken Snyder gold mine in Nevada for a share in the Australian gold miner. The agreement doubled Franco-Nevada's annual gold production and made it the largest shareholder in Normandy with a 19.9 percent stake. The deal marked the first time that cash-rich Franco-Nevada had walked down the consolidation trail since its failed attempt to merge with South Africa's Gold Fields Ltd. (GFIJ) last year. Last September, the South African government blocked Franco-Nevada's proposed $3.7 billion merger with Gold Fields saying it would not benefit the country's economy. "Consolidation is good for the industry. It has to happen," said Lassonde. "It's good for us. It reduces the number of names out there and makes our franchise worth a great deal more. It makes our investment in Normandy worth a whole lot more. So, all around, we believe it's a good thing." Although he refused to be specific, Schulich said Franco-Nevada, which has a warchest of about C$940 million ($618 million) in cash, would be very active in the near term. "There will be developments in the next three months," he said. "Wait and see." Having failed once already in South Africa, Schulich said the company will now concentrate on politically stable regions where foreign investment is encouraged. "The radar screens are in politically secure areas, which, in our minds, are primarily Australia and North America," he said. "We consider Australia an attractive area to invest." Schulich acknowledged that his company was also eyeing Homestake, but was apparently beaten to the punch by Barrick. "We thought Homestake was a very attractive asset and had it remained independent it is one that we would have considered doing something with, certainly down the road," he said. "It was certainly on our radar screens and very high on our radar screens." Schulich and Lassonde, both widely respected in the industry for their knowledge of the markets, are bullish about the price of gold, which Lassonde said could hit $500 an ounce over the next three to five years as market supply diminishes. Gold, which has traded in a 52-week range of $252.80 to $326.25, last traded in London on Wednesday at $274.80 an ounce. ($1