Speculation that Barrick Gold Corp. may attempt to acquire Denver-based Newmont Mining Corp. sent Newmont shares up 5.5 percent in trading Tuesday before they closed with a smaller gain.
Officials of Toronto-based Barrick, the world’s largest gold miner, denied that a takeover was in the works, and No. 2 Newmont declined to comment.
Newmont shares ended the day with a gain of 62 cents to $41.07. The 1.5 percent rise was the second-largest advance Tuesday on the Standard & Poor’s 500 Index.
Speculation that Barrick may bid for Newmont “is widespread in the market,” said Charl Malan, a fund manager at Van Eck Associates Corp. in New York, which owns stock in both companies.
A Barrick acquisition has been rumored for months, but the company’s chief executive sought to quell the speculation.
“If we’re taking over Newmont, I must have missed that board meeting,” Barrick CEO Gregory Wilkins said Tuesday in an interview with CNBC. “When we do our valuations, I find our prospects much better than trying to put the companies together.”
Newmont spokesman Omar Jabara said the company “is aware of the rumor, but our policy is not to comment on rumors or speculation about what other companies may or may not do.”
Barrick overtook Newmont last year as the largest gold miner after acquiring Placer Dome for $10 billion.
In an Aug. 17 interview with The Denver Post, Newmont’s new CEO, Richard O’Brien, said he plans to expand the company through development of existing gold properties and acquisitions of other mining firms.
But O’Brien said he has no immediate plans to regain the No. 1 position.
“My goal is to be the best,” he said. “If at some time we’re the best and can also be the biggest, that’ll be fine.”
Gold analyst Thomas Winmill of the New York- based Midas Fund said that although recent weakness in Newmont shares make it a more attractive takeover prospect, he sees no reason that either Barrick or Newmont would pursue a merger.
“I can’t figure out why Barrick would bother,” he said. “They’ve got a lot of interesting projects and an attractive portfolio. Newmont’s portfolio is not as attractive, they’re facing higher (production) costs in 2008, and they have a history of strained community relations. Barrick doesn’t have any of that baggage.”
Winmill said O’Brien, who succeeded former Newmont CEO Wayne Murdy last month, and Barrick’s Wilkins both show a desire to stay in charge of their companies.
“I don’t see either one of them stepping aside,” he said. “And I’d be very surprised if a new CEO (O’Brien), in the midst of telling the industry how he’s going to turn the company around, would throw in the towel at this point.”
Bloomberg News contributed to this report.
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
Miner is missing after Nev. cave-in
By The Associated Press
Winnemucca, Nev. – A miner is missing and believed trapped after a cave-in early Tuesday at an underground gold mine near Winnemucca, authorities said.
Two mine rescue teams were sent to the scene of the early-morning accident at the Getchell Mine, said Dirk Fillpot, a Mine Health and Safety Administration spokesman.
“One miner was believed to be trapped in the accident,” Fillpot said.
The miner was reportedly working on a piece of heavy machinery called a roof bolter when the ground shifted and buried the device. It was not immediately known how far below the surface the accident occurred.
The Getchell Mine, owned jointly by Toronto-based Barrick Gold Corp. and Denver-based Newmont Mining Corp., is operated by SMD, an independent contractor, said Barrick spokesman Vincent Borg.
The missing worker is an employee of SMD, Borg said.
The company could not immediately be reached for comment.
