New York, USA — MININGREVIEW.COM — 16 November 2009 – Top bullion producers such as Barrick Gold Corporation and Goldcorp Incorporated may attempt to take over smaller companies such as Osisko Mining Corporation to boost output amid dwindling supplies and rising prices.
“I hear enough rumours and rumblings out there to say that I’d be shocked if something wasn’t coming up in the next two months,”, said former Newmont Mining Corporation president Pierre Lassonde in an interview here. “You’re going to see a number of companies disappear.”
Bloomberg News reports that Lassonde’s forecast echoes other executives and analysts expecting gold-mining companies valued at US$10 billion (R80 billion) or more to resume making acquisitions. Gold has gained 25% this year while the dollar is down 7% against a basket of six major currencies.
“Osisko “’ a US$2.13 billion (R17 billion) company that received approval this year to develop a Quebec deposit with at least 6.3 million ounces of gold “’ is among the most likely targets,” said Paul Burchell, a Dundee Securities Corporation mining analyst in Toronto, in an interview with Bloomberg. “Allied Nevada Gold Corporation and San Gold Corporation are also likely targets,” he added, but declined to speculate on when the offers may be made.
“We’re always top three in that debate” about which company is next, Osisko CEO Sean Roosen said in a recent interview. “We will either build the mine or get paid for one. We’re shareholders first and management second.”
Goldcorp expects to produce 2.4 million ounces of gold this year compared with 2.32 million ounces in 2008. “Your production profile will fall off if you don’t add new things, and so we’re constantly on the lookout for new things,” said CEO Chuck Jeannes.
Barrick expects to produce 7.2 million to 7.6 million ounces of gold this year, compared with 7.66 million ounces in 2008, the Toronto-based company said in its earnings announcement last month. “We’re always looking at how we can add better-quality assets; how we can identify deposits as early as possible, whether through exploration or acquisition,” said Barrick CEO Aaron Regent.
The value of completed gold mining acquisitions so far this year is about US$8.15 billion (R65 billion), compared with US$19.3 billion (R150 billion) in 2008 and US$13.5 billion (R105 billion) in 2007, according to Bloomberg data.