BARRICK GOLD CORPORATION |
1 | PRESS RELEASE |
• | Barrick does not require a shareholder vote and can complete this transaction expeditiously. | |
• | In contrast, a foreign bidder, e.g., one with a primary listing on the NYSE, would likely require a vote by its shareholders in order to issue equity to acquire Placer Dome. | |
• | As a Multi-Jurisdictional Disclosure System (MJDS) issuer, Barrick’s offer has a term of approximately 40 days and will expire on December 20, 2005, unless extended or withdrawn. | |
• | Barrick anticipates no delay in its ability to complete the offer associated with an extended review of the transaction by the regulatory authorities in any jurisdiction. |
• | A foreign bidder is subject to a review by Industry Canada and would need to demonstrate that its proposed transaction would be of net benefit for Canada. | |
• | As an all-Canadian transaction, there is no such requirement for Barrick’s bid for Placer Dome. | |
• | Some reviews of proposed foreign acquisitions of significant Canadian companies have taken several months to complete. |
• | The combination of Barrick’s offer and separate agreement with Goldcorp Inc. recognizes the proximity of our respective assets and the estimated US$240 million in annual synergies that can be uniquely created and captured. | |
• | The Canadian synergy opportunities that are created through Goldcorp buying Placer Dome’s Canadian assets strengthen the value creation opportunity of this transaction. This is largely due to savings available by combining the adjacent Campbell and Red Lake operations in Ontario. | |
• | We believe the proposed sale of certain assets to Goldcorp ensures the maximum realization of synergies from the acquisition of Placer Dome’s assets. |
• | Barrick as a Canadian bidder can utilize the Canadian tax cost bump rules to achieve tax-efficient sales of Placer Dome assets, such as the sale of Canadian assets to Goldcorp. | |
• | A foreign bidder or a Canadian bidder smaller than Placer Dome cannot access these rules except in an all-cash bid. | |
• | Placer Dome has structured its operations to work within the Canadian tax rules. Barrick as a Canadian company is well-positioned to integrate Placer Dome’s existing structure and arrangements in a most tax-efficient fashion. |
BARRICK GOLD CORPORATION |
2 | PRESS RELEASE |
• | A foreign bidder may find Placer Dome’s existing arrangements incompatible with the home jurisdiction tax rules and require costly unwinding. |
• | As at September 30, 2005, Barrick’s hedge position as a percentage of reserves is almost exactly equivalent to Placer Dome’s; Barrick has approximately 14% of reserves hedged as compared with Placer Dome’s 13% (reserves as at December 31, 2004). Excluding the hedges allocated to Pascua-Lama and its associated reserves, Barrick’s hedge percentage drops to 9% of December 31, 2004 reserves (excluding Pascua-Lama reserves). Barrick has previously announced its intention to further reduce its hedge position going forward. | |
• | Barrick’s hedge mark-to-market position as a percentage of market capitalization is not materially different from Placer Dome’s as of September 30, 2005. | |
• | Barrick’s plan to reduce its hedge position has been clearly evident since December 31, 2001. Since that date, Barrick has reduced its hedge position by over 11 million ounces or 46% while Placer Dome has increased its hedge position over the same period. |
• | Barrick’s strong balance sheet enables a strong cash component to the offer for Placer Dome. | |
• | The combined pipeline of projects can be successfully built on the foundation of strong financial resources — without the issuance of new equity. |
• | Over the past decade, Barrick has aggressively and successfully built nine projects around the world. They include: Lagunas Norte and Pierina in Peru; Veladero in Argentina; Bulyanhulu and Tulawaka in Tanzania; Meikle mine, Goldstrike power plant and roaster facilities in Nevada; and Cowal in Australia (currently under construction). | |
• | These projects were built on time and created significant value in the process — representing over two million ounces or 40% of Barrick’s 2005 expected production. | |
• | Over the same period, Placer Dome has built the Turquoise Ridge (Getchell) and Musselwhite mines — which contributed about 320,000 ounces or 9% of their expected production in 2005. To date, its key development projects have not even been permitted. | |
• | Barrick’s proven track record includes a core competency in permitting, financing, and developing large scale mines and allows it to continue with its pipeline of projects which include: East Archimedes in Nevada, Buzwagi and Kabanga in Tanzania, and Pascua-Lama in Chile/Argentina. | |
• | Placer Dome’s shareholders will benefit from this track record and management competence. | |
• | Pascua-Lama is expected to receive its Environmental Impact Study approvals in the first quarter of 2006 and to commence construction later in the year with an average annual production rate of approximately 750,000-775,000 ounces. The mine is expected to commence production in 2009. | |
• | The estimate in Placer Dome’s Directors’ Circular of Barrick’s 2010 production is misleading and does not fully reflect the potential of future production from Barrick’s quality assets. |
BARRICK GOLD CORPORATION |
3 | PRESS RELEASE |
INVESTOR CONTACTS: |
MEDIA CONTACT: | |||
James Mavor |
Mary Ellen Thorburn | Vincent Borg | ||
Vice President, |
Director, | Vice President, | ||
Investor Relations |
Investor Relations | Corporate Communications | ||
Tel: (416) 307-7463 |
Tel: (416) 307-7363 | Tel: (416) 307-7477 | ||
Email:
jmavor@barrick.com |
Email: mthorburn@barrick.com | Email: vborg@barrick.com |
BARRICK GOLD CORPORATION |
4 | PRESS RELEASE |