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

To: geo in vancouver who wrote (2688)	2/9/1999 2:06:00 PM
From: Link Lady	Respond to of 3282

canoe.com Focus-Barrick posts profit but strategy under fire TORONTO (Reuters) - Canada's Barrick Gold Corp. reported a fifth consecutive quarter of robust profits Tuesday amid fallout from the surprise resignation of its chief executive and a failed takeover bid for upstart Argentina Gold Corp. Speculation Toronto-based Barrick had temporarily lost its footing swirled in markets shortly after the company failed in its C$5.00-a-share, or C$160-million, hostile takeover bid for Vancouver-based Argentina Gold and its prized Veladero gold mine in northwestern Argentina. Argentina Gold shareholders rebuffed the offer, which expired late last night, after a bitter two-month catfight between the two Canadian gold companies. News of Barrick's setback sent shares of Argentina Gold plunging C$0.80 to C$4.49, or 15 percent, in heavy midday trading on the small but lively Vancouver Stock Exchange. Barrick saw its stock fall C$1.30 to C$28.80 a share, or 4.3 percent, Tuesday on the Toronto Stock Exchange. "It (Argentina Gold) had a value to us which we were prepared to pay a reasonable price. We made a final offer and the offer has now expired," Barrick Chief Operating Officer John Carrington said in a morning conference call Tuesday. Barrick, which owns 9.9 percent of Argentina Gold and 40 percent of Veladero, operates the Pascua gold property six kilometers away and was keen to fold the property into its growing operations in the remote Andean mountain range on the Chilean-Argentine border. Uncertainty about Barrick's growth strategy was compounded by the surprise resignation late Monday afternoon of Paul Melnuk, the man handpicked last spring to lead the senior gold producer into the next decade. Melnuk, who mysteriously resigned as Barrick chief executive and president for "personal reasons," was a key architect of the takeover fight for Argentina Gold, which was contested and fought through the British Columbia Securities Commission. The timing of the resignation, just hours before the expiry of the takeover offer and one day before Melnuk was due to chair Barrick's year-end earnings presentation in Toronto, threw a wrench into the normally smooth Barrick operation. "This is a little blip. I think the Melnuk resignation may be partially related to the Argentina Gold situation. I don't know that, but it seems like a reasonable conclusion," said Douglas Cohen, analyst with Morgan Stanley Dean Witter in New York. Barrick Chairman Peter Munk, who worked with Melnuk for more than a decade and once called the former oilman a miracle worker, said Barrick would weather the "regrettable" resignation. "Barrick will carry on. There will not be a ripple, there will not be a change, there will not be an interruption," the mercurial Munk told analysts and media. Barrick, the second largest gold producer in North America, said it earned $83 million, or $0.21 a share, in the fourth quarter of 1998, compared with a profit of $75 million, or $0.20 a share, in the same period last year. For the full year, the company reported record earnings of $301 million, or $0.79 a share, against a loss of $123 million, or $0.33 a share, after special provisions in 1997. Barrick also said it produced 3.2 million ounces of gold at a cash operating cost of $160 per ounce in 1998 compared with output of 3 million ounces at $182 an ounce in 1997. The company predicted it would raise production to 3.6 million ounces this year at a cash cost of $125 an ounce. "The 1998 record results are an excellent example of what Barrick is able to achieve - consistent growth in earnings and cash flow per share, regardless of the price of gold," Munk said. Gold traded at $286.90 an ounce Tuesday, down from a 1998 high of about $315 an ounce. Barrick's springboard for future growth is now centered on its Pascua project, which could ultimately become the largest gold mine in South America, Barrick's Carrington said. Pascua is expected to begin production in 2002 with annual output of 675,000 ounces of gold and 20 million ounces of silver. Barrick raised its estimate of Pascua's total reserves to 20 million ounces of gold and 440 million ounces of silver. The company also said a recent swap of assets in Nevada with Denver-based Newmont Mining Corp. would enhance exploration potential and production synergies at Barrick's nearby Goldstrike property