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Gold/Mining/Energy : ARP - V Argentina Gold -- Ignore unavailable to you. Want to Upgrade?

To: Quickdraw who wrote (2443)	1/31/1999 6:48:00 PM
From: Link Lady	Respond to of 3282

In case interested. ottawacitizen.com Arequipa accepts sweetened offer from Barrick UPDATE The issue: Whether junior mining exploration company Arequipa Resources Ltd. would get a higher price than the $27-per-share takeover bid made by Barrick Gold Corp. What's new: Arequipa announced Friday it has an agreement with Barrick for a higher offer - $30 a share - worth $1.1 billion. What it means: If Barrick is successful, the takeover will boost its presence in the growing Latin American mining sector, specifically at the various Peruvian properties owned by Arequipa. What's next: Barrick's offer expires Aug. 27, but a rival company topping Barrick's bid could still surface. $1.1-billion deal still subject to challenge By Bertrand Marotte Southam Newspapers TORONTO - Arequipa Resources Ltd. has agreed to a sweetened takeover bid of $30 a share - or $1.1 billion - from Barrick Gold Corp. Arequipa's directors said Friday they have accepted Barrick's revised bid, $3 higher than the original $27-per-share offer, and are recommending that Arequipa shareholders accept it. Under the new offer, shareholders can take either $30 in cash or 0.79 per cent of a Barrick common share plus 50 cents for each Arequipa share held, with a ceiling of 14.4 million Barrick shares being issued. Barrick's revised offer for the junior exploration company expires at midnight Aug. 27. Barrick also has a lock-up agreement with directors and shareholders of Arequipa who own about 23 per cent of the company's shares, including Arequipa chairman David Lowell and president Catherine McLeod. But that doesn't mean Barrick has clinched the deal. Vancouver-based Arequipa reserves the right to accept any rival bid higher than $31.50 that Barrick does not match. If it does so, Toronto-based Barrick will pocket a so-called "break-up fee" of $18 million for its trouble. Arequipa had been holding out on Barrick's original, $989.4-million offer made last month, saying several other mining companies had been reviewing exploration data from Arequipa's Pierina gold-and-silver property in Peru. The site is in the very early stages and there are no hard numbers on just how much gold Arequipa is sitting on, but the company said earlier this week it may have understated the amount of gold in rock samples being tested. "To justify the price Barrick is paying, from my perspective, I would hope there would be 10 million ounces of gold at Pierina and other sites Arequipa has in Peru," said Manford Mallory, a gold-mining analyst at Research Capital Corp. in Toronto. Barry Allan, an analyst with Gordon Capital Corp. in Toronto, has estimated there is no more than seven million ounces of gold at Pierina. Mallory sees Barrick's revised bid as a pre-emptive strike against a competing offer. Barrick, the world's third largest gold miner, has the cash resources to take a gold strike to production, an expensive proposition that would have been daunting for Arequipa. "There was a lot of board discussion of our ability to bring a large deposit into production and it was agreed we would not be able to go it on a stand-alone basis," McLeod, 36, said Friday. Talks with Barrick officials over the past few days led to Barrick's revised offer, she said. "They were willing to recognize the additional value we had created and (Barrick chairman) Peter Munk said he would like to wrap it up." She said the fact Barrick is now offering shares makes its bid more attractive to shareholders who would face stiff capital-gains tax penalties if they took cash only. "I certainly will pick up a big chunk of Barrick stock," she said in a telephone interview from Vancouver. Munk said in a news release that the Barrick shares give Arequipa shareholders "the opportunity to participate in the global operations of Barrick and will continue to have an interest in the advanced stage Pierina gold property." McLeod said she hasn't had time to give much thought to what her role will be if Barrick's takeover is successful. "I think I just need a bit of a vacation," said the former stock-broker and daughter of respected mining entrepreneur Don McLeod. Southam News