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

To: Vitalsigns who wrote (79385)	11/16/2001 3:34:41 PM
From: long-gone	Respond to of 116741

As if S.A. government would let that happen. Fat chance.

To: Vitalsigns who wrote (79385)	11/16/2001 3:39:35 PM
From: long-gone	Read Replies (1) \| Respond to of 116741

Please state your source showing ABX owns 46% of AU.

To: Vitalsigns who wrote (79385)	11/16/2001 3:49:22 PM
From: rolatzi	Read Replies (1) \| Respond to of 116741

A Golden Deal? Newmont Mining's (NEM:NYSE - news - commentary - research - analysis) agreement Wednesday to acquire Australian gold-mining company Normandy Mining Ltd. and Canadian-based Franco-Nevada Mining is pretty complicated. Yet, one analyst sees a way to make money from it. If the deal goes through, it would create the world's largest gold producer with 97 million ounces of gold reserves and 8 million ounces per year in production. While Newmont's all-stock bid for both companies offers a nice premium, its lack of cash makes a competing offer possible. Plus, Newmont's largest competitor, Barrick Gold (ABX:NYSE - news - commentary - research - analysis), could jump into the fray. "The real story here is probably not about value anymore. It is about ego and control," says Barry Allan, gold analyst at Toronto-based Research Capital. "Barrick has been boxed into a corner by Newmont and Franco-Nevada. If this deal goes through, every time Barrick looks across its property line, Newmont will be there: in Nevada, in Australia and in Canada. And, to add insult to injury, since Franco holds royalty rights to some Barrick production mines in Nevada, Barrick would end up paying royalties to Newmont. That won't happen if Barrick has any way to avoid it. These two companies despise each other." Hence, Allan thinks Barrick will do something: either make a higher, part-cash offer for Franco-Nevada or try to support a competing offer for Normandy from AngloGold (AU:NYSE - news - commentary - research - analysis). AngloGold, whose $1.47 per-share bid for Normandy was trumped by Newmont, has said it would respond to Newmont's move within 10 days. At current stock levels, Newmont's bid for Normandy is valued at about $1.51 to $1.56 a share. Allan thinks investors could be rewarded by purchasing Franco-Nevada and being short Barrick in anticipation of a bid. "At some level, there will be a bidding war for Normandy and potentially for Franco-Nevada," he says. "If Barrick does bid on a strategic and egocentric level, you don't want to own Barrick stock." Franco-Nevada is currently trading about $2 below the current Newmont offer. With Barrick feeling pressure either way, this paired trade has some appeal while you wait to see which goose ultimately lays the golden egg. thestreet.com