Placer Dome to sell oil and gas assets

By putting its oil and gas assets on the selling block, Placer Dome (TSE) has signalled that it intends to stick to its core business of mining. But the move is also giving rise to widespread speculation that the international mining company may be cashing up to make a major acquisition.

Placer Dome’s officials said the timing of the decision to dispose of the oil and gas operations is based on the current high level of investment interest in this type of asset and is not linked to an acquisition strategy.

Placer Dome retained Morgan Stanley and Co. to assist in the sale of the assets which have a book value of about $450 million. This estimate is before provisions of $90 million for related minority-held preferred shares and bank debt.

The sales of the oil and gas operations are expected to take place during 1990. The major company already has a substantial cash reserves from the sale in 1988 of its stake in Falconbridge.

Although Placer Dome is known as one of the world’s largest producers of gold, it also produces silver, copper, molybdenum and mercury.

Placer Dome also announced that Alf Paton, managing director of Placer Pacific, will become chairman effective in May. At that time, Lawrie Reinertson, senior vice- president of exploration for Placer Dome, will become managing director and chief executive of Placer Pacific.