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Gold and Silver

Barrick invites Newmont to restart merger talks – by Rachelle Younglai (Globe and Mail – April 24, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Barrick Gold Corp. has formally asked Newmont Mining Corp. to resume merger talks after their negotiations hit an impasse late last week, according to a person familiar with the situation.

The North American-based gold miners had come close to agreeing on an all-stock deal, but their discussions broke down over which assets to spin out from the combined company, other sources have said.

The companies had aimed to make an announcement before their annual shareholder meetings this month. Colorado-based Newmont held its meeting in Delaware Wednesday morning, and Toronto-headquartered Barrick’s meeting is scheduled for April 30.

Barrick e-mailed the request to restart talks to Newmont, outlining the terms of their friendly proposal as well as issues that still must be resolved, according to the source familiar with what transpired.

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About 40,000 illegal miners ignore Peru’s deadline to formalize status – by Cecilia Jamasmie (Mining.com – April 23, 2014)

http://www.mining.com/

Peru’s government has began legalizing tens of thousands of informal gold miners this week, in an effort to restrict an activity that has cost the country millions of dollars in lost fees and severely damaged the environment.

However, about 40,000 of roughly 110,000 illegal miners ignored the Saturday deadline to legalize their status, evading government efforts to bring them into the formal economy.

Over the past five years unregulated mineral extraction in the South American nation, especially gold mining, became an industry of its own, to the point experts calculated it was bringing more profit into the country than drug trafficking. The activity has also led to violence, pollution and the destruction of over 40,000 hectares of the country’s Amazonic rainforest.

In response to those challenges, Peru’s government launched in 2012 a program to incorporate illegal and informal miners into the system by April 2014. Minister of Energy and Mines Jorge Merino justified the measure saying Peru had reached a point of “no return” in the fight against the fly-by-night activity.

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Deadly Illegal Mining Booms Below South African City of Gold – by Kevin Crowley (Bloomberg News – April 24, 2014)

 http://www.bloomberg.com/

Smoke rises from a derelict mine shaft 25 miles east of Johannesburg, where illegal miners cook, work and sleep below ground for weeks at a time.

They have broken through a slab of concrete covering the entrance to the shaft, one of 6,000 abandoned mines, many around Johannesburg, known as “eGoli,” or “City of Gold” in Zulu. At least 40 unlawful prospectors have died in South Africa this year as mines collapse, workers succumb to poisonous gases and gangs wage turf wars underground.

“Any mistake and you feel you’re going to be killed,” said Joseph Sithole, 23, an undocumented Mozambican migrant, as he stood among corrugated-iron shacks and rubbish-strewn paths near the mine. He recounted how last year he dashed to one side of a shaft after hearing a crack, narrowly avoiding being buried by falling rocks. He felt his way to the surface through clouds of dust.

Sithole is one of 14,000 people the government estimates are now involved in illegal mining, which comes as a drop in gold prices and aging ore bodies shut South African shafts. The practice has grown to create a complex criminal industry valued at 6 billion rand ($566 million) a year, Mineral Resources Minister Susan Shabangu said in February.

The government now plans to block up entrances to abandoned mines, compel owners to heighten security and increase convictions for illegal mining.

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Ex-Goldman Banker Emerges as Barrick Gold Dealmaker – by Liezel Hill and Christopher Donville (Bloomberg News – April 22, 2014)

http://www.bloomberg.com/

A week before Barrick Gold Corp. (ABX) Chairman Peter Munk retires, his successor John Thornton is emerging as a dealmaker as the former Goldman Sachs Group Inc. banker pursues a bid to combine the two biggest gold miners.

Negotiations between Barrick and Newmont Mining Corp. broke off last week amid minor disagreements while leaving open the possibility that discussions could still resume, two people with knowledge of the matter said April 19.

The deal under discussion would have seen Thornton become executive chairman of the combined company while the chief executive officer would have been Gary Goldberg, who currently leads Newmont, the people said. Toronto-based Barrick’s CEO Jamie Sokalsky would have led a smaller gold producer spun off from the merged company, according to the people.

The proposed tie-up and its management reshuffle confirm Thronton’s elevation as Barrick’s most senior executive. The 60-year-old, who had no role in the mining industry until he joined the company’s board just over two years ago, is set to succeed Munk, Barrick’s 86-year-old founder, as chairman at the annual shareholders meeting next week. Leading a successful acquisition of Newmont (NEM), in what would be the biggest gold takeover, would set up Barrick to do further deals, including ones involving other commodities.

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[Barrick’s] Munk touts ‘significant synergies’ in potential Newmont deal – by Rachelle Younglai (Globe and Mail – April 23, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Barrick Gold Corp.’s founder and chairman Peter Munk said merging with rival Newmont Mining Corp. could result in “significant” cost savings, especially in Nevada where the two North American gold miners operate.

The world’s two largest gold producers had hoped to announce an all-stock merger deal before Newmont’s annual shareholder meeting in Delaware on Wednesday, but disagreed over which assets to spin off, sources have said. Although talks were halted late last week, the companies are still open to merging in an effort to cut costs amid the deep slump in gold prices, sources have said.

“Combining Barrick and Newmont could result in significant synergies and cost savings, particularly in Nevada, where our operations are literally next door to one another,” Mr. Munk said in an e-mailed statement.

Gold has lost more than a third of its value since peaking above $1,900 (U.S.) an ounce three years ago. The weaker precious metal price, now trading below $1,300 an ounce, has forced the gold industry to overhaul operations to preserve cash.

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Hunt Becomes Billionaire on Bakken Oil After Bankruptcy – by Brendan Coffey (Bloomberg News – March 28, 2013)

http://www.bloomberg.com/

William Herbert Hunt was once one of the wealthiest men on Earth. With his brother, Nelson Bunker Hunt, the billionaire bought more than 195 million ounces of silver — 60 percent of the U.S. market — in the 1970s. By early 1980, their stake was valued at more than $9 billion.

The Hunts’ position imploded when silver prices plummeted 80 percent over the course of a few weeks in March 1980, culminating 33 years ago this week on what traders called Silver Thursday. The crash rattled Wall Street and sent the Texas brothers into bankruptcy.

Hunt is once again a billionaire, this time with oil. In October, he sold 43 percent of the North Dakota petroleum assets owned by his closely held Petro-Hunt LLC for $1.45 billion to Houston-based Halcon Resources Corp. (HK) The cash and stock deal made Hunt Halcon’s largest shareholder and boosted his net worth to $4.2 billion, according to the Bloomberg Billionaires Index.

“The numbers are out there,” said Hunt, 84, in a telephone interview from his Dallas headquarters. “We’re a family-owned company — a private company — and are really not interested in being out in the public arena.” Hunt hasn’t appeared on an international wealth ranking in 25 years. He said oil will continue to fuel the U.S. economy.

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NEWS RELEASE: It’s Gold Mining, MacGyver-Style, when FOOL’S GOLD Premieres on Discovery May 13

New original Canadian series mines for gold…and for laughs!

Discovery Fool’s Gold 

TORONTO (April 21, 2014) – Todd Ryznar and his ramshackle crew at Shotgun Exploration are looking to strike it rich in the gold-laden hills of Northern Ontario and retiring in style. The only problem for this start-up DIY mining company? They don’t know what they’re doing! Premiering Tuesday, May 13 with back-to-back episodes at 8 and 8:30 p.m. ET/PT on Discovery, FOOL’S GOLD follows modern-day prospector Ryznar and his ragtag gang of would-be miners in their search for gold. But first, they’ll have to figure out what to do and how to do it – after all, their search for gold won’t be easy when the main equipment is made from a rusty bed frame and a an assortment of old washing machine parts!

Commissioned by Discovery Canada and produced by Toronto’s 11 Television Canada, the humorous eight-part series joins the beleaguered Ryznar and his rookie crew – at the mine and on the town, through bug-infested days, frigid nights, and beer-fuelled weekends – as they make a hilariously haphazard foray into the world of the professional gold digger. Armed with backwoods ingenuity, perseverance, stubbornness – and little else – will their beginner’s luck be rewarded, or will their hopes be dashed?

A real estate speculator-turned-gold prospector, Ryznar purchased the Straw Lake Beach Mine near Fort Frances, Ontario in 2005. After years of failed attempts of finding gold on his own, Ryznar has convinced a hastily-assembled group of his friends to spend eight weeks in the Ontario wilderness in a single-minded search for their share of Northern Ontario’s surprisingly plentiful gold deposits.

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Goldcorp Inc abandoning hostile bid for Osisko – by Peter Koven (National Post – April 22, 2014)

The National Post is Canada’s second largest national paper.

Goldcorp Inc. has elected not to raise its hostile offer for Osisko Mining Corp., leaving the company to be acquired by Yamana Gold Inc. and Agnico Eagle Mines Ltd.

Vancouver-based Goldcorp announced on Monday afternoon that it will let its $3.6-billion hostile bid for Osisko expire on April 22 instead of raising it.

Goldcorp vowed all along that it would not overpay for Osisko, and most investors suspected it would not raise its offer for a second time. Goldcorp launched its first bid in January and increased it earlier this month.

“We stated from the beginning of this process that we would remain disciplined with respect to our offer to acquire Osisko, and our decision not to amend the offer is consistent with that commitment,” chief executive Chuck Jeannes said in a statement.

“We move forward with an outstanding portfolio of mines and projects, and our focus will remain on maximizing the value of our investments and generating strong returns for our shareholders.”

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Osisko Mining CEO Sean Roosen lashes out at Canada’s ‘predatory’ takeover process – by Nicolas Van Praet and Peter Koven (National Post – April 17, 2014)

The National Post is Canada’s second largest national paper.

MONTREAL/TORONTO – Sean Roosen never wanted to sell Osisko Mining Corp. The chief executive of Quebec’s biggest home-grown miner has said repeatedly that Goldcorp Inc. ambushed him with a hostile offer before he even got the chance to prove what kind of money his main production asset, the Malartic gold mine, could make for investors.

So now that he’s done his duty in perhaps extracting the most he can for Osisko with a friendly $3.9-billion tag-team offer from Yamana Gold Inc. and Agnico-Eagle Mines Ltd., he’s lashing out at the Canadian system that led to this outcome in the first place.

“You’ve got a regulatory regime here that is set for predatory behaviour,” Mr. Roosen said in an interview Wednesday. He said rules requiring TSX-listed bidders to win approval from their own shareholders for an acquisition being paid for with a new share issue equal to more than 25% of the current float favours larger companies. “All the bigger companies basically have free range to rape and pillage.”

The mining executive certainly isn’t the first person to criticize Canada’s bidder-friendly takeover rules. A veritable hoard of high-profile people have pointed out the shortcomings of the regulatory regime, which makes it nearly certain that a company will get sold once it is put into play. But few have said it in terms quite so stark.

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Osisko Mining deal leaves Vancouver’s Goldcorp out in the cold (updated) – by Craig Wong (Vancouver Sun – April 16, 2014)

http://www.vancouversun.com/index.html

Friendly deal valued at $3.9 billion will see the gold miner acquired by Yamana Gold and Agnico Eagle Mines Ltd. Osisko Mining Corp. (TSX:OSK) announced a new friendly deal Wednesday valued at $3.9 billion that will see the gold miner acquired by Yamana Gold and Agnico Eagle Mines Ltd.

The offer for the company and its Canadian Malartic mine in Quebec tops a rival hostile bid by Goldcorp (TSX:G) that was valued at $3.6 billion or $7.65 per share.

The deal will also see Osisko shareholders receive shares in a new company that will receive a royalty on the production from Canadian Malartic and the company’s existing exploration properties as well as hold $155 million cash and the company’s Guerrero exploration project in Mexico.

Osisko president and chief executive Sean Roosen noted the first hostile offer by Goldcorp valued his company at about $2.6 billion in January. “I think that we’ve delivered a significant amount of value to shareholders,” he told a conference call with investors.

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Even in this market, miners see assets worth overpaying for – by Brian Milner (Globe and Mail – April 17, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The bargain-hunters scouring the mining world for dirt-cheap acquisitions must be getting frustrated. The battle for Osisko Mining Corp. in Quebec and a Chinese company’s full-price purchase of a Peruvian copper mine show that softer demand, weaker prices and the pounding many miners have taken in the stock market aren’t pushing producers to part with valuable core assets for chump change.

Miners’ willingness to hang tough suggests the battered sector has reached a bottom. Producers are willing to wait and for good reason – there is an increased willingness among potential buyers to pay top dollar for high-quality assets.

In the Osisko case, Yamana Gold Inc. and Agnico Eagle Gold Inc. have reached a friendly deal to buy the Montreal-based gold miner for $3.9-billion and divvy up its assets. The stock and cash offer works out to $8.15 a share, 11 per cent above a revised bid from Goldcorp Inc.

Goldcorp sweetened its original hostile offer by about $1-billion to $3.6-billion when it became apparent that Osisko wasn’t about to be low-balled on its prized Canadian Malartic mine in Quebec.

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Osisko strikes new $3.9-billion deal with Yamana, Agnico Eagle – by Bertrand Marotte (Globe and Mail – April 16, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Osisko Mining Corp. has struck a deal valued at about $3.9-billion that would see Yamana Gold Inc. and Agnico Eagle Gold Inc. acquire Osisko in a cash-and-stock transaction.

Meanwhile, Goldcorp Inc. — which recently raised its hostile bid for Osisko and its rich Canadian Malartic gold mine to $3.6-billion — said it plans to nominate its own slate of 11 directors to replace Osisko’s board members at Osisko’s annual meeting May 20.

The new offer — which adds Agnico Eagle as a partner — represents roughly an 11 per cent premium to the implied value of Goldcorp’s hostile offer. Under terms of the deal announced by Osisko and its partners Wednesday, Agnico Eagle and Yamana will form a joint acquisition entity that will acquire all of Osisko’s common shares.

Agnico and Yamana will each own 50 per cent of Montreal-based Osisko and they will form a joint committee to operate the Canadian Malartic mine in northwestern Quebec.

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NEWS RELEASE: Agnico Eagle and Yamana Gold announce a friendly acquisition agreement with Osisko Mining Corporation

(All amounts expressed in U.S. dollars unless otherwise noted)

C$8.15 per share offer provides superior shareholder value

TORONTO, April 16, 2014 /PRNewswire/ – Agnico Eagle Mines Limited (NYSE: AEM, TSX:AEM) (“Agnico Eagle”), Yamana Gold Inc. (TSX:YRI, NYSE: AUY) (“Yamana”) and Osisko Mining Corporation (TSX:OSK; Deutsche Boerse:EWX) (“Osisko”) are pleased to announce that they have entered into an agreement (“the Agreement”) pursuant to which Agnico Eagle and Yamana will jointly acquire 100% of Osisko’s issued and outstanding common shares for total consideration of approximately C$3.9 billion, or C$8.15 per share. The total offer consists of approximately C$1.0 billion in cash, approximately C$2.33 billion in Agnico Eagle and Yamana shares, and shares of a new company (“Spinco”) with an implied value of approximately C$575 million.

The offer represents approximately an 11% premium to the implied value of the current Goldcorp Inc. (“Goldcorp”) hostile bid. Agnico Eagle, Yamana, and Osisko will host a joint conference call today at 10:00 a.m. EDT to discuss the transaction.

Terms of the Agreement

Under the Agreement, Agnico Eagle and Yamana will form a joint acquisition entity (with each company owning 50%) which will acquire by way of a plan of arrangement all of the outstanding common shares of Osisko.

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World Gold Council Press Release: NEW REPORT PREDICTS SUSTAINED STRONG GOLD DEMAND IN CHINA IN NEXT FOUR YEARS

http://www.gold.org/

Follow the World Gold Council @GOLDCOUNCIL and download the full report at http://www.gold.org/supply-and-demand/china-report

New York, 15 April 2014 – A major report published today by the World Gold Council “China’s gold market: progress and prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes(t)[1] per year to at least 1,350t by 2017[2]. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.

The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s. It also highlights why despite this steep growth in demand, the market will continue to expand, irrespective of short term blips in the economy.

The next six years will see China’s middle class grow by over 60%, or 200m people, to a total of 500 million. Comparing this to the total population of the US, which stands at 319m, puts the size of this new market of affluent consumers, with the propensity to buy gold, in perspective.

In addition to these newly emerging middle classes, rising real incomes, a deepening pool of private savings and rapid urbanisation across China suggest that the outlook for gold jewellery and investment demand in the next four years will remain strong.

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Palladium at Highest Since 2011 on Ukraine as Gold Gains – by Nicholas Larkin and Glenys Sim (Bloomberg News – April 14, 2014)

http://www.bloomberg.com/

Palladium rose to the highest price since 2011 in New York on concern supply may be restricted as tension escalated over Ukraine. Gold reached a three-week high.

Russia and the U.S. traded barbs at an emergency meeting of the United Nations Security Council as a deadline passed for pro-Russian separatists to leave buildings they occupied amid escalating violence in eastern Ukraine. The U.S. and European Union have vowed to impose tougher sanctions on Russia if President Vladimir Putin’s government makes another move threatening Ukraine’s sovereignty.

Palladium advanced 13 percent this year as the threat of disruption to Russian exports compounded concerns about supply spurred by a miners’ strike in South Africa that started in January. The nations are the world’s biggest producers. Gold futures climbed 1.2 percent last week as a weaker U.S. dollar and falling equities increased demand for a haven.

“It’s a double-edged sword for palladium, we’re seeing robust demand and also supply constraints,” James Moore, an analyst at FastMarkets Ltd. in London, said today by phone. “You’ve got the South African strikes and concern regarding Russian sanctions as tension bubbles along. Investment demand is strong.”

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