Barrick strikes $7.3-billion deal for Equinox

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Barrick strikes $7.3-billion deal for Equinox
TIM KILADZE
Globe and Mail Update
Published Monday, Apr. 25, 2011 7:17AM EDT
Last updated Monday, Apr. 25, 2011 9:42AM EDT

Barrick Gold Corp. (ABX-T50.08-2.99-5.63%) has struck a deal to buy Equinox Minerals Ltd. (EQN-T8.370.8711.60%) for $7.3-billion in cash, making Barrick the fourth player in a heated bidding war for copper assets and placing the company in a standoff with China’s Minmetals Resources Ltd.

Barrick’s bid, supported by Equinox’s board of directors, is worth $8.15 per share, 16 per cent higher than the $7.00 per share that Minmetals offered in a hostile bid for Equinox a few weeks ago. The question now is how badly Minmetals wants Equinox’s assets in Zambia and Saudi Arabia and whether it will come back to top Barrick’s friendly bid.

The deal also raises questions about Barrick’s operational profile in Africa. In 2010 the company spun off its Tanzanian gold assets into a new company, African Barrick Gold, with the hope that they would get more value as part of a standalone company. The deal also marks a bigger foray into copper for the gold miner. Recently Barrick has focused on developing its massive Cerro Casale gold-copper deposit in Chile as well as increasing production at its Zaldivar copper project in the same country.

But it is no surprise that a higher bid has surfaced. Shortly after Minmetals announced its offer, many analysts noted that the price was likely too low to secure a takeover because Equinox has proven near-term production growth that is highly coveted in the mining world.

“The acquisition of Equinox would add a high-quality, long-life asset to our portfolio and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions,” said Barrick president and chief executive officer Aaron Regent.

“Combined with our Zaldivar mine and Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world.”

The deal is also favourable to Equinox. The miner, listed on both the Australian and Toronto Stock Exchanges, said it has received interest from a number of parties since Minmetals announced its hostile bid and the company’s board ultimately supported the offer that Barrick put on the table.

“We believe this offer is superior to the public proposal made by Minmetals in terms of certainty and value. Given the immediate value creation opportunity, we are recommending our shareholders tender to the Barrick offer,” said Craig Williams, Equinox’s president and CEO.

However, in supporting Barrick’s bid, Equinox has agreed to cancel its own hostile takeover bid for Lundin Mining (LUN-T8.210.212.63%), which was set to move to a shareholder next week. Cancelling that offer could complicate the Barrick deal because Minmetals has always stated it would only purchase Equinox if the Lundin offer fell through. With Lundin now out of the picture, Minmetals may not need to be as cautious in bidding.

That news will come as a relief to Lundin, which has had some bitter words for Equinox in the past few weeks. Lundin and Inmet Mining struck a deal to merge earlier in 2011 but Equinox shook that negotiated deal up by launching a hostile bid for Lundin. The Lundin-Inmet merger has since fallen apart, which freed Inmet from any deals, and now Lundin is also free to do what it pleases.

songjiang

ABX 的 FA 怎么样？Debt to equity 很高啊。长期来看 Goldcorp 和它比谁的风险小些？

COS

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Hot gold lifts Barrick to $1-billion

TORONTO— The Canadian Press
Published Wednesday, Apr. 27, 2011 7:48AM EDT

Barrick Gold Corp. (ABX-T47.75-1.75-3.54%), the world's largest gold miner, has credited higher prices for helping sharply improve the company's first-quarter bottom line.

Toronto-based Barrick, which reports in U.S. dollars, said earnings in the period ended March 31 rose 22 per cent to $1-billion (U.S.), or $1 per share, compared with $820-million, or 82 cents per share, a year earlier.

Barrick bets on copper Revenue increased to $3.09-billion from $2.58-billion.

Analysts polled by Thomson Reuters had predicted an average of $1.04 earnings per share in the first quarter.

The results reflected “higher realized prices for both gold and copper and better than expected total gold cash costs,” Barrick said in a news release.

Gold production of 1.96 million ounces at total cash costs of $437 per ounce and net cash costs of $308 per ounce was ahead of plan primarily as a result of higher production from the company's Cortez, Goldstrike and Veladero mines.

Meanwhile, Barrick said it was on track to meet its 2011 guidance of 7.6 million to eight million ounces at total cash costs of $450-$480 per ounce, or net cash costs of $340-$380 per ounce, “positioning Barrick as one of the lowest cost senior gold producers.”

Barrick, already the world's largest gold miner, made a bold move into the copper sector Monday with a friendly $7.3-billion bid to acquire Canadian-Australian miner Equinox Minerals Ltd.

With the world supply of available gold mines wearing thin, the deal allows Barrick to expand into a metal that is selling at near record prices. On Tuesday, copper closed up three cents at $4.33 a pound The company has been riding high on the price of gold, which is topping record highs nearly every day, although it closed down $10.20 at $1,498.90 per ounce on Tuesday.

During the quarter, Barrick was allowed to transport ore from its Cortez Hills mine in Nevada after an environmental review was approved. The mine had been operating on a restricted basis under an injunction since last April.

The Cortez property is expected to produce between 1.30 and 1.45 million ounces in 2011, much higher than its original guidance of between 1.08 million and 1.12 million ounces of gold this year.

Barrick owns and operates gold mines in Canada, the U.S., Peru, Argentina, Chile, Australia and Papua New Guinea and employs about 20,000 people around the world.

flovestock

比市场预期差,看市场怎么反应了,再向下图好象就不是很好看啊

也有人认为给Equinox的价太高了