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

To: William Peavey who wrote (24340)	12/15/1998 7:33:00 PM
From: William Peavey	Read Replies (2) \| Respond to of 116955

Canada's Placer Dome Inc. <PDG.TO> and Barrick Gold Corp. <ABX.TO>, two of North America's three gold titans, signaled the industry's new spirit of togetherness during the past week with a series of proposed acquisitions and deals worth an estimated $1.5 billion. Vancouver-based Placer, which began identifying attractive gold mines 18 months ago, grabbed the reins of the merger bandwagon on Monday when it announced a $1.1-billion takeover of Denver-based Getchell Gold Corp <GGO.TO>. The deal came on the heels of Placer's decision last month to invest $235 million in South Africa's biggest gold mine, South Deep. The joint venture project with Western Areas <WNAJ.J>, will double Placer's total ore reserves to 60 million ounces. Production-hungry Placer also is in the process of arranging financing for the development of its $575-million Las Cristinas gold mine in Venezuela's Orinoco Basin, a property estimated to contain 12 million ounces of gold. Determined to double gold production at Getchell's properties in Nevada to about 800,000 ounces per year by 2003, Placer is positioned to vault past Barrick into second place among North American gold producers. Only Denver-based Newmont Mining Corp. <NEM.N> would remain larger. "I believe the merger will fit us like a glove. It also brings us good quality ounces in North America with significant upside for the future and nicely balances our entries into Venezuela and South Africa," Placer Chief Executive John Willson said in a conference call on Monday. Placer's main Canadian rival, Toronto-based Barrick, however, is not sitting on the sidelines of the production parade. Barrick, which has made acquisitions the hallmark of its growth strategy for the past 15 years, launched a C$142-million hostile takeover bid last week for high-flying Argentina Gold Corp. <ARP.V> in a bid to wrest control of the prized Veladero gold mine in northwestern Argentina. Last May, Barrick joined forces with South Africa's Anglogold Ltd., the world's biggest bullion producer, to explore gold properties in Mali, Senegal and the Democratic Republic of the Congo. Analysts said it was not surprising that consolidation, whether forced or otherwise, had emerged in an industry gripped by profound pessimism. Although gold has stabilized within striking distance of the psychologically important $300 an-ounce level, it spent much of last summer plumbing 18-year lows near $270 an ounce. It traded at $291.10 an ounce on Monday. "It (merger and acquisition activity) is a product of the low gold price," said John Ing, president of Maison Placements Canada Inc. in Toronto. "Gold mining is a very capital-intensive business and the lower the gold price gets the more difficult it is to get development funds," Ing said. Ing said the merger fever, which began six months ago when San Francisco's Homestake Mining <HM.N> Company bid $306 million for total control of Canada's Prime Resources Group Inc. <PRU.TO>, would likely continue as long as gold remained out of favor. Traditionally viewed as the ideal hedge, or safe haven, against international crisis and inflation, gold relinquished that role last year as financial turmoil swept through Asia and panicky investors rushed to buy the U.S. dollar. Wary investors once again exercised the same healthy skepticism on Monday as they cast a thumbs down on the latest consolidation in the gold sector. Shares of Placer fell C$2.90 to close at C$18.90, or 13.3 percent, on the Toronto Stock Exchange on Monday. Shares of Barrick, which also fell last week after the company announced its takeover bid for Argentina Gold, closed C$0.40 higher at C$29.70, or 1.4 percent, on the TSE. ($1=$1.54 Canadian) 19:02 12-14-98 Copyright 1998 Reuters Limited. All rights reserved. I recently hooked up with Pointcast and was surprised to see no mention of this Getchell deal in their Mining Industry channel. This notice came off AOL. Except for that excellent presentation by Bill Midas Murphy, this has been the only bright spot on my metals horizon since Buffett had to acknowledge his silver accumulation. And we all know what the prices have done since that mini-nova last Spring. Bill Peavey