Newcrest: More buy-outs

NEWCREST Mining Ltd, the new owner-operator of Lihir gold mine, said it is eyeing further merger and acquisition opportunities in the Asia-Pacific and West Africa.
The miner just completed a US$10 billion takeover of Lihir Gold Mine.
“There are great opportunities in this part of the world, and compared to the Americas, there’s a lot less competition for some of those assets,”   company chief executive Ian Smith, told ABC TV last Sunday.
“We buy in so we can apply our expertise in exploration and build assets.”
“It is driven by recognising gold’s rightful place as a risk-leveller, so people see gold as part of a portfolio now, to be a legitimate part of how you address risk,” Smith said.
“Takeovers in the industry have picked up this year because of strong gold prices,” the head of Asia-Pacific investment banking for metals and mining at Merrill Lynch in Hong Kong, Greg Fournier, said last month.
Gold companies have completed or are evaluating acquisitions estimated at US$37.5 billion this year, more than double last year’s total, Bloomberg data showed.
Gold for immediate delivery hit a record US$1265.30 an ounce on June 21 and is headed for a 10th annual gain.
Prices might reach US$1,300 an ounce this year as investors seek a shield against financial turmoil, weak currencies and inflation, the London researcher GFMS said.
“Half the pundits say that going forward, we are going to have inflation, another half of pundits say we are going to be facing deflation.
“Gold is a good part of portfolio risk management in both of those environments,” Smith said.
LGL and Newcrest shareholders agreed last month to a US$10.45 billion share-and-cash deal that will create the world’s fifth-biggest gold producer.
The national court of Papua New Guinea approved the deal last Aug 27.
Gold output would grow 8.2 % a year, from 1.76 million ounces to 3.75 million ounces, for Newcrest and by 980,000 ounces for Lihir, according to Newcrest report last month.