Majors Plotting Mergers & Acquisition Moves

April 20, 2009

Later this year, we expect some shake-ups in the precious metals mining industry. The major mining companies have been raising cash this year and there are juniors that look too attractive to ignore. We've compiled some information below to help you position yourself for possible merger and acquisition moves on the horizon:

Barrick Gold (ABX)

The king of precious metals miners, Barrick Gold has quickly expanded to become not just a powerful precious metals miner but an oil miner as well. Last year it completed purchases of Arizona Star Resources and Cadence Energy, which specialize in oil and natural gas production.

In 2008 CEO Aaron Regent said he's looking to grow the company through acquisitions in addition to launching a new exploration program for 2009.

Goldcorp (GG)

The world's second largest gold miner is expected to expand through acquisition after having most recently acquired interests in Lihir Gold Limited and Gold Eagle Mines, which had 8 square kilometers of property in the mineral-rich Red Lake, Ontario region. If Goldcorp's strategy is to consolidate Red Lake, then Rubicon Minerals (RBY) would be an attractive target. Rubicon owns several square kilometers of land in Red Lake and has returned phenomenal drilling results indicating a significant high-grade gold zone.

Newmont Mining Corp (NEM)

No. 3 gold miner, Australia-based Newmont Mining Corp has publically declared its plans to expand through acquisition, but has not given specific details about targets. A Newmont executive told reporters, "We've got a number of targets on the radar screen," and thanks to the company's finances, they'll be well situated for the perfect acquisition opportunity."

In 2007 it acquired Miramar and has most recently acquired remaining interests in its prolific Boddington, Australia mine. Since then, the company has spent time dispelling rumors of a potential merger with Barrick Gold.

Anglo American's (AAUK)

Gold mining giant, Anglo American's $1.4 B investment in Northern Dynasty's 50% -controlled Pebble, Alaska mine is seen as its first attempt at acquiring the junior miner. Considered one of the world's largest active gold-copper mines, the Pebble property has made Northern Dynasty (NAK) a viable takeover target.

Kinross (KGC)

Kinross (KGC) has also been in acquisition mode in recent years. In 2008 it completed a merger with Aurelian Resources and acquired interests in both Chapleau Resources Limited and Minera Santa Rosa, which previously controlled the Lobo-Marte gold project in Northern Chile.

Kinross CEO Tye Burt hinted at acquisitions this year at the March 2009 Reuters Global Mining and Steel Summit. He recognized that there are many takeover targets, but not a great deal of potential buyers. More importantly, he said that Kinross has received tons of proposals from bankers who would love to put together an acquisition package.

Yamana Gold (AUY)

In a different direction, Yamana Gold (AUY) CEO Peter Marrone said that rather than focusing on acquisitions of juniors, it is looking at consolidation among the major gold miners. In 2007, Yamana emerged as a major miner after the $ 3.5 B merger with Meridian Gold.

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