Under the proposed deal, Placer shareholders would receive $US20.50 per share with 13% in cash and the balance in Barrick shares. Barrick said it would pay a maximum of $US1.22 billion in cash and issue up to 303 million shares under the deal.
In addition, Goldcorp has agreed to buy some of Placer’s assets for $US1.35 billion should the deal go ahead, including Placer’s interest in the Campbell, Porcupine and Musselwhite gold mines in Ontario, the La Coipa silver mine in Chile, and a 40% stake in the Pueblo Viejo development project in the Dominican Republic.
If the acquisition is successful, Barrick said the combined company would have 149.8 million ounces of gold in proven and probable reserves with 63.3Moz in resources, and 6.54M pounds in proven and probable copper reserves.
Many of Barrick, Placer and Goldcorp’s operating mines, development projects and exploration properties are in close proximity to each other and Barrick estimates it could save around $US240 million per year through operating and capital efficiencies following the acquisition.
Placer currently has 16 mining operations over seven countries, including the Granny Smith, Kalgoorlie West and Kanowna Belle operations in Western Australia, the Henty mine in Tasmania, and the Osborne mine in Queensland.
In 2004, Australia was Placer’s largest gold-producing country accounting for 950,000oz of gold and 90 million pounds of copper.
Placer said in a statement it would not comment until it has completed a review of Barrick’s offer.
Barrick’s Australian operations include the Plutonic, Lawlers, Darlot and Kalgoorlie joint venture (Superpit) with Newmont in Western Australia, and the 2.5Moz Cowal development project in New South Wales, which is expected to come online early next year.
The acquisition would make Barrick the world’s largest gold producer ahead of Newmont Mining, which is expected to produce around 6.5Moz in the 2005 calendar year.