Rep. Paul would outlaw ESF intervention in metals markets

By Michael Weir
The West Australian
a href=http://www.thewest.com.au/20011217/business/tw-business-home-http://www....
sto36656.html
December 17, 2001

North American gold miners Barrick Gold and Homestake
Mining have wrapped up their $US2.3 billion ($4.43 billion)
merger, clearing the way for the expanded Barrick to enter
the battle for Normandy Mining.

Barrick remains the last realistic contender to take on
AngloGold and Newmont Mining in the tug-of-war for
Australia's biggest gold producer.

At stake is the ability to lay claim to being the biggest
gold miner in the world.

For the past couple of weeks there has been speculation
Barrick would mount a counter-bid, but no firm evidence
to suggest it would.

On Friday Homestake shareholders approved the merger,
which was announced in June.

The new company will be the second-biggest gold producer,
pouring an estimated 5.7 million ounces a year, compared
with AngloGold's 7 million ounces.

quot;Our goal is to be the most profitable, lowest-cost producer,
not to be the biggest producer,quot; Randall Oliphant, Barrick's
president and chief executive, said in a statement.

Views are still mixed over whether Barrick will make a tilt
for Normandy and get involved in what is already a two-way
tussle between Newmont and AngloGold.

Newmont has the upper hand with its revised bid last week,
which values Normandy at $1.86 a share. Newmont has
also secured the support of the Normandy board and
chairman Robert de Crespigny, who has recommended the
bid to shareholders.

AngloGold's revised cash and scrip bid was worth $1.75
based on Friday's closing share price.

Normandy closed on Friday at $1.76, which suggests the
market is not expecting much more money to be put on
the table.

In a note to clients, Credit Suisse First Boston said it
appeared there was quot;very little leftquot; in the battle for
Normandy.

However, it suggested AngloGold may offer an incremental
sweetener, which could quot;largely close any pricing gap that
exists in several days.quot;

One school of thought has AngloGold letting Normandy fall
to Newmont, then organising its own merger with the new
Barrick.

An AngloGold-Barrick, with annual production approaching
13 million ounces, would once again take the title as the
biggest gold producer from an expanded Newmont (8 million
ounces).

One thing for certain is that Normandy shareholders will be
big winners out of the latest round of corporate
rationalisation.

The latest Newmont bid values Normandy at more than $4
billion, double what it was before AngloGold kicked off the
bidding duel in early September.

Mr. de Crespigny has warned shareholders not to do
anything until they receive Normandy's response to the
formal Newmont offer, which has not yet been lodged.

It is expected to go out today or tomorrow.

On Friday Normandy formally rejected AngloGold's revised
offer.

quot;Having regard to the increased value and improved terms
of the proposed Newmont offer and the fact that it exceeds
the value of AngloGold's revised offer ... by a significant
margin and all other relevant considerations, the Normandy
directors recommend you reject the AngloGold offer,quot; Mr.
de Crespigny said.