Thursday, December 22, 2005

 

Gold Mining Giants Merge

Reuters reports on a mining merger that got a mixed reception on Wall Street. "Toronto-based Barrick Gold Corp., the world's No. 3 gold producer, agreed on friendly terms to acquire Placer Dome Inc. after raising its offer for the Vancouver gold producer to $10.4 billion, the companies said Thursday. That deal prompted Vancouver-based gold producer Goldcorp Inc. to buy certain mining assets from Barrick for just under $1.49 billion in cash."

"In afternoon trading on the New York Stock Exchange, Goldcorp shares rose 67 cents, or 3.4 percent, to $20.45; shares of Placer Dome fell 63 cents, or 2.8 percent, to $22.02; and shares of Barrick fell 60 cents, or 2.2 percent, to $26.62."

"The new $10.4 billion offer replaces Barrick's last offer of about $9.4 billion that had been rejected by the board of Placer Dome, the world's sixth-largest gold mining company. Under the agreed to terms, Placer shareholders will get either $22.50 in cash or 0.8269 of a Barrick common share plus 5 cents cash per share."

"Barrick, Canada's biggest gold miner, has limited its cash for the offer at $1.34 billion and shares to be issued at 333 million. Placer's board unanimously backed the new offer."

"Under the $1.49 billion transaction, Goldcorp will get Placer's stake in the Campbell mine, the Porcupine joint venture and the Musselwhite joint venture in Ontario. The company will also receive a 50 percent interest in the La Coipa mine in Chile, and a 40 percent interest in the Pueblo Viego development project in the Dominican Republic."

Comments:
And this with gold being up much higher in the AM.
 
No one could be happier than me over the movement in the price of gold. However "the poor mans gold" silver has outpreformed gold by a long shot. Silver has yet to make on the radar screen of many investors, but I have a feeling that is going to change in the years to come...
 
The 2 to 10 are getting ever closer to inversion,

http://finance.yahoo.com/bonds/composite_bond_rates

The 2, 3, & 5 seem to be in inversion mode for a while(prolly in and out).

The flight to safety may be just begining.
 
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