Newmont Mining shocked the gold mining world on Nov. 14 by launching a simultaneous, all-share takeover bid for Canada’s Franco-Nevada Mining and Australia’s Normandy Mining. The deal would create the world’s largest gold miner in several categories: reserves, production, leverage to gold, liquidity and earnings before deductions. For the report period ending Nov. 13, Newmont fell $1.45 to US$22.25, though it plummetted to the low US$20s after the bid became public.
If successful, the bid would eclipse AngloGold‘s earlier A$3.2-billion offer for Normandy. AngloGold ended the period unchanged at US$17.05.
The remaining gold majors came off recent highs as the yellow metal showed some price weakness: Gold Fields slipped a penny to US$4.60; Homestake Mining eased off 19 to US$8.01; Ashanti Goldfields declined 12 to US$3.35; and Compania de Minas Buenaventura fell 62 to US$18.91.
Platinum miner Stillwater Mining continued to decline, falling another $1.05 to US$14.95 after announcing it had paid down US$25 million that was previously borrowed under a revolving credit line of US$50 million. The company’s cash position stands at US$30 million after the paydown, with US$200 million having been drawn down under a US$250-million credit line.
BHP Billiton, the world’s fourth-largest copper producer, was up 7 to US$9.07 after promising copper-production cuts of about 17% in response to falling demand. The company will temporarily reduce annual output by 170,000 tonnes from Escondida in Chile and Tintaya in Peru.
Most of the base metal sector rallied on the cutback news: Phelps Dodge soared $3.46 to US$30.95 on heavy trading; Rio Tinto marched forward $2.76 to US$70.75; Anglo American rose 88 to US$13.74; Southern Peru Copper added 75 to close at US$9.75; and WMC jumped up $1 to US$20.75. Freeport-McMoRan Copper & Gold‘s B shares traded sideways at US$10.65.
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