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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: onepath who wrote (67502)	10/13/2009 11:50:59 AM
From: Tommaso	Respond to of 78406

Tuesday, October 13, 2009 9:57 AM Barrick deal benefits New Gold Andrew Willis Barrick Gold’s latest South America acquisition is expected to boost the fortunes of mid-tier mining play New Gold. Barrick spent $465-million (U.S.) on Tuesday to buy a 70 per cent stake in the El Morro property in Chile from Xstrata. The site is close to existing Barrick gold and copper mines, so the buyer should be able to achieve substantial cost savings on a project with a $1.4-billion budget. Debt-heavy Xstrata can pay down loans and focus its portfolio. The other 30 per cent of El Morro is owned by Canadian intermediate mining company New Gold, which has the right of first refusal on the Xstrata stake. From New Gold’s point of view, Barrick’s arrival is a positive development. First off, the implied value of New Gold stake in $199-million, and BMO Nesbitt Burns analyst Andrew Kaip said in a research report Tuesday that he had valued the stake at $103-million. That alone will help New Gold's stock price. Looking ahead, Mr. Kaip said New Gold has a number of attractive options. “Barrick’s interest would provide New Gold with a committed, gold-focused partner for future El Morro development, “said the analyst. “Alternatively, BMO Research expects New Gold to consider divesting of El Morro either for cash or through an asset swap for one of Barrick’s non-core mining operations.” New Gold is backed by a number of the top players in gold mining, with a board that includes Pierre Lassonde, Ian Telfer and former Barrick CEO Randall Oliphant. The company’s strategy is to grow by acquisition. Judging from the press releases on Tuesday, Barrick and Xstrata cut this deal without investment bankers, as no advisors were named. Barrick is flush with cash after raising $4-billion in a stock sale, an underwriting earmarked for raising the capital needed to unwind Barrick's bullion hedging program.

To: onepath who wrote (67502)	10/15/2009 8:08:49 PM
From: tyc:>	Respond to of 78406

>>"..This twist puts NGD in the driver's seat.." It sure does ! El Morro promises to be very profitable.... Although it might well be too large for NGD to swallow, their right of first refusal could be attractive to some other well healed miner. NGD's interest might command an worthwhile premium.