Australia's AurionGold poised to reject bid from Canada's...

Australia's AurionGold poised to reject bid from Canada's Placer
Source: Associated Press
Publication date: 2002-05-30


MELBOURNE (Dow Jones/AP) -- Australian gold miner AurionGold Ltd. appears prepared to reject Placer Dome Inc.'s $1.13 billion takeover bid unless the Canadian company sweetens its offer.
AurionGold managing director Terry Burgess said Thursday that market reaction suggests the Canadian precious-metals company will have to raise the offer it presented Monday.

AurionGold is still assessing Placer's bid and faces a June 11 deadline for issuing a formal response and recommendation to shareholders.

Earlier Thursday in a letter to shareholders, AurionGold chairman Richard Warburton stoked speculation that AurionGold is seeking another bidder by saying the company is examining ``alternative options.''

Topping the list of potential bidders is South Africa's AngloGold Ltd., Gold Fields Ltd. and Canada's Barrick Gold Corp., all of which have operations in the Kalgoorlie gold province in Western Australia where AurionGold's operations are centered.

AurionGold shares fell 13 cents, or 2.7 percent, to 4.64 Australian dollars, or $2.62, overnight.

Based on Placer's recent stock price, the offer values AurionGold at 4.28 Australian dollars, or $2.41, a share. At the time the bid was launched the offer was worth 4.51 Australian dollars, or $2.54, a share.

The fragmented world gold industry is fast consolidating as major producers in North America and South Africa compete for scale in a bid to reduce costs.

If successful in its bid, Placer Dome will rise to fifth from seventh in world gold production.

Denver-based Newmont Mining Corp. is the world's largest producer with over 8 million ounces of production, and is followed by AngloGold, Barrick and Gold Fields.