1994: A LOOK BACK — The events that led to . . .The making

Dominating mining news this past year was the dramatic battle for control of Lac Minerals which, until recently, was one of Canada’s — and the world’s — leading gold producers.

The suspense-filled struggle was triggered by the initial, bold bid made by Margaret (Peggy) Witte, president of Royal Oak Mines (TSE). It ended with the final coup de grace executed by the winner, American Barrick Resources (TSE). The following is a review of the events leading up to the formation of North America’s largest gold producing company:

July 7: Royal Oak makes a bid to acquire a controlling interest in senior gold producer Lac Minerals. At the time, the offer is valued at about $2 billion, or $13.59 a share. Lac shareholders are given the option of exchanging one Lac share for either 2.4 Royal Oak shares or 1.7 Royal Oak shares and $3.75 cash. The offer is subject to certain conditions, including acquiring two-thirds of the outstanding shares. The bid is to expire Aug. 9, 1994.

July 8: Lac’s board of directors retains independent financial advisers to evaluate the bid and formulate a recommendation to its shareholders. July 13: Royal Oak mails its offer to Lac shareholders. Lac requests a copy of Royal Oak’s shareholder list, giving rise to speculation that Lac might make a counter-offer for control of Royal Oak.

July 18: James Pitblado, former chairman of RBC Dominion Securities and a non-executive director of Lac, is elected to chair all board meetings pertaining to the Royal Oak offer.

Lac directors reject the offer on the advisory board’s recommendation. Conjecture arises that Lac will invoke its shareholder rights protection plan — the so-called “poison pill” — to ward off the takeover bid. In conjunction with the rejection, Lac announces results from exploration programs. Both categories of reserves and geological resources from all its projects are increased to 13.5 million oz., for a combined total of 27 million oz.

July 19-22: Speculation surfaces that other companies may unleash hostile takeover bids or, alternatively, act as “white knights” by coming to Lac’s aid. Lac enters discussions with TVX Gold (TSE) and Kinross Gold (TSE) about a possible business combination.

July 22: Peter Allen, Lac’s chairman, president and chief executive officer, resigns in an attempt to diffuse the issue of the quality of Lac’s management. James Pitblado is appointed interim CEO, and the board begins searching for someone to hold the post permanently.

July 25: Based on the new reserve and resource figures, American Barrick enters the melee and offers to buy all outstanding shares of Lac for either 0.43 of a Barrick share or $4 cash and 0.31 of a share. At the time, the offer is worth about $14 a share. Barrick’s conditions include acquiring at least two-thirds of the outstanding shares. The offer is due to expire Aug. 26.

Questions are asked as to how Barrick will account for the estimated $1 billion in goodwill. It is suggested that Barrick sell off some of Lac’s Canadian assets to pay down the goodwill.

July 29: TVX and Kinross propose a business combination in which Lac shares are valued at about $15 each. The combination would have Lac owning 50% of the new entity, while Kinross and TVX would control Lac’s assets in North and South America, respectively.

Aug. 5: Lac appoints former Homestake chairman Peter Steen as its new CEO. Barrick simplifies its offer, enabling it to buy all of Lac’s outstanding shares.

Aug. 8: Just before its offer is due to expire, Royal Oak raises its offer to either $5 a share and two Royal Oak shares or 2.9 shares in total. This increases the gross value of the offer to $2.4 billion, or $16.50 per share. The offer is to expire Aug. 19.

The Lac board formally rejects Barrick’s offer.

Aug. 10: Royal Oak asks the Ontario Securities Commission (OSC) to block Lac’s poison pill.

Aug. 11: Lac rejects Royal Oak’s second offer.

Aug. 15: Barrick supports Royal Oak’s application to the OSC to block Lac’s poison pill.

Aug. 17: Royal Oak threatens to withdraw its bid if the OSC fails to prohibit Lac from using the poison pill.

Aug. 18: The OSC asks Royal Oak to extend its bid deadline so that it may have sufficient time to rule on the poison pill issue. Royal Oak complies by extending its bid to Aug. 19.

Aug. 19: The OSC conditionally accepts Royal Oak’s application to prohibit Lac from administering the poison pill. Royal Oak claims victory and extends the offer to midnight Aug. 23.

Aug. 22: Barrick asks the OSC for permission to amend its offer, allowing the company to acquire deposited shares prior to a possible extension of Barrick’s offer.

Royal Oak makes another application to the OSC, which would enable the company to acquire all the outstanding shares, should its bid be successful. Royal Oak’s offer expires, having fallen short of the required two-thirds support.

Aug. 23: Royal Oak extends its bid to midnight Sept. 6. In the evening, Peter Munk and other Barrick executives meet with Pitblado and Steen to negotiate a revised Barrick offer.

Aug. 24: Barrick ups its bid to either $5 cash and 0.32 of a share, or 0.49 of a share. Lac’s board of directors approves the bid and recommends acceptance to its shareholders. The strength of the Barrick offer and the support from Lac’s management have the effect of shifting market sentiment in favor of Barrick’s bid.

Aug. 30: Royal Oak withdraws from the bidding process and tenders shares in favor of the Barrick bid.

Sept. 6: Lac shareholders vote on Barrick’s bid.

Sept. 19: It is announced that Barrick has received more than 90% support from Lac shareholders. Royal Oak raises $100 million to finance other potential acquisitions.

Oct. 17: Lac Minerals is delisted and Barrick acquires all the remaining outstanding shares.

Oct. 31: Barrick announces plans to sell four Lac projects: the Macassa and Golden Patricia mines in Ontario, the Bullfrog mine in Nevada, and the Red Mountain project in British Columbia. Analysts estimate that the projects, combined, could fetch up to US$300 million. Several companies, including former bidders Royal Oak and Kinross, are suggested as possible buyers of either one or all of the projects.