http://dailynews.yahoo.com/h/nm/20010625/bs/minerals_homestake_dc_2.html
...............A little something the Gold Bugs seldom mention while touting 'gold' and "gold coins". :

Barrick, currently North America's second largest gold producer, said it was offering 0.53 of a Barrick share for each of Homestake's 263.3 million outstanding shares, valuing each Homestake share at $8.71.

Barrick shares, halted briefly pending the announcement, fell C$1.31 to C$23.74 on the Toronto Stock Exchange after the announcement. Homestake shares rose $1.35 to $8 in New York.

``Homestake's high-quality, low-cost assets are very complementary to Barrick's,'' Barrick Chief Executive Officer Randall Oliphant said in a statement announcing the deal.

``Our production profile is enhanced by Homestake's annual production of approximately 2 million ounces at similar low costs. In addition to becoming the largest producer in Canada and the United States, we will be the second-largest producer in Australia.''

The statement said both companies' boards had approved the merger, and key shareholders of Walnut Creek, California, based Homestake have already agreed to tender their shares, making up some 12 percent of the company.

Barrick is based in Toronto.

The merged company is expected to have a market capitalization of about $9 billion and annual production of about 6 million ounces of gold at a cash cost of some $156 an ounce. It will also have about $900 million in cash on hand.

``It's a jumbo deal,'' said John Ing, president of Maison Placements Canada. ``Just when everybody had given up on consolidation, they buy the franchise.''

Barrick said the new company would have combined gold forward sale position totaling 18 million ounces, at an average annual minimum price of $345 per ounce. Gold was trading in London on Monday at $272.90.

Hedging, a common practice among larger producers in the industry, allows a company to cushion the effect of a falling gold price by selling future production at a fixed price.

Barrick said it expected the deal to bring annual cost-savings of approximately $55 million from 2002, mostly in the areas of taxation, exploration and administration.

The deal also greatly expands Barrick's worldwide presence. The company has grown from one mine in 1983 to a worldwide mining powerhouse with operations in Canada, the United States, Peru and Tanzania.

By acquiring Homestake it now adds a stable of mines and exploration properties in Canada, the United States, Chile and Australia -- home to 40 percent of Homestake's output. It will be the world's second largest gold company after South Africa's AngloGold (ANGJ.J).

``This strategic merger combines the operational, financial and human resources of two great companies to create the preeminent global gold mining company,'' said Oliphant.

-- Anonymous, June 25, 2001