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

To: goldsheet who wrote (85855)	5/26/2002 8:14:40 PM
From: marek_wojna	Read Replies (1) \| Respond to of 116818

Bob, could you post your opinion regarding the offer, please. Thanks in advance. Marek. <<05/26 19:22 Placer Dome Offers $1.1 Bln in Stock for AurionGold (Update2) By Emma Moody Vancouver, May 26 (Bloomberg) -- Placer Dome Inc. said it made an unsolicited offer to buy Australia's AurionGold Ltd. for $1.1 billion in stock to become the world's fifth-largest gold miner as the price of the metal has surged 15 percent this year. Vancouver-based Placer is offering 17.5 of its shares for every 100 AurionGold shares, or A$4.51 ($2.51) a share. The offer is 30 percent higher than Friday's closing price. The company said it has the support of South Africa's Harmony Gold Mining Co., which holds 9.8 percent of AurionGold. Buying AurionGold will boost Placer's annual gold output by more than a third to about 3.8 million ounces allowing the miner to catch up to larger rivals Barrick Gold Corp. and Newmont Mining Corp. and may start a bidding war as rivals battle for increased production. ``Exploration has dropped off in the last few years quite dramatically and the only efficient way these companies can grow is to make acquisitions,'' said Gary Armor, a fund manager at AMP Henderson Global Investors. ``There's always a chance of'' another bidder for AurionGold, he said. AurionGold executives weren't immediately available to comment. Placer Chief Executive Jay Taylor said he spoke with AurionGold Chief Executive Terry Burgess. ``We made contact yesterday though I haven't had any detailed conversations with management,'' he said. Shares of AurionGold, formed by the merger of Delta Gold Ltd. and Goldfields Ltd., have surged 39 percent the past six months as gold prices rose to a two-year high and a takeover battle raged between Newmont and AngloGold Ltd. for Normandy Mining Ltd.. Australian gold miners have become a target of foreign bidders hoping to bolster production. Newmont this year bought Normandy, Australia's largest gold miner, and Barrick bought Homestake Mining Co. in December. Gold Fields Ltd., the world's No. 4 gold miner, mulled buying Harmony's stake in AurionGold, though it pulled out earlier this year because the acquisition would have been too expensive. AurionGold is the largest independent gold producer in Australia. `Save Money' Placer, the world's No. 6 gold producer, said the acquisition of AurionGold would save about $25 million by combining interests in the Granny Smith and Porgera mines. The acquisition is the company's first major purchase in three years. ``When you look at the properties, it makes sense to put the two companies together,'' Placer's Taylor said in an interview. ``This is about sustaining and growing our near-term gold production.'' The purchase would give Placer 100 percent of the Granny Smith gold mine in Western Australia, up from 60 percent now. Placer's stake in the Porgera mine in Papua New Guinea would rise to 75 percent from 50 percent. The Canadian company operates both those mines. As well, it would gain ownership of the Kanowna Belle gold mine in Western Australia. In all, Placer would have extra output of about 1 million ounces of gold. A combined Placer and AurionGold will have interests in 17 operating mines across four continents, Placer said. ``There are obviously synergies between the two,'' said AMP's Armor. Still, Placer's track record on acquisitions hasn't been good. It's previous big takeover, the $1.2 billion purchase of the Getchell mine in Nevada, resulted in writedowns that led to two years of losses. The offer is conditional on Placer acquiring at least 50.1 percent of the outstanding AurionGold shares and winning approval from the Australian government. Placer is being advised by Macquarie Bank Ltd. and Morgan Stanley Dean Witter & Co. is helping in North America.