, with Kinross Gold Corp.
eventually emerging the winner last week.
Three sources familiar with the talks said Canadian heavyweights Barrick Gold Corp.
and Agnico Eagle Mines Ltd.
, as well as Australia’s Evolution Mining Ltd.
and Newcrest Mining Ltd.
, were
offered the opportunity to bid on Great Bear. The parties were given access to Great Bear’s confidential data, conducted site visits at Red Lake in Northwestern Ontario and almost all tabled formal offers.
it reads “offered the opportunity to bid”. How does offering the opportunity to bid work? And how can we go about doing the same? I’m pretty sure others would be more than happy to jump on board which would ultimately only up our “buy out” price
The Globe and Mail is not identifying the sources as they were not authorized to speak publicly on the matter. Kinross, Barrick, Agnico and Evolution declined to comment. Newcrest did not respond to a request for a statement.
“I can’t really comment on the internal details of the Kinross transaction, other than to confirm it was multi-party,” Chris Taylor, chief executive officer of Great Bear, wrote in an e-mail to The Globe.
The intense competition for the extremely early-stage Great Bear, which has no proven gold reserves at its Dixie project, illustrates how rare big gold finds are becoming worldwide, and the lengths the largest mining companies are going to secure them.
Kinross, Canada’s second-biggest gold miner by production, announced on Dec. 8it had reached a friendly agreement with Great Bear to acquire the firm for $1.8-billion in cash and stock, a 26.5-per-cent premium to its market price. The proposed buyout of Great Bear is among the most expensive ever for an exploration company.
After the deal was announced, Kinross shares fell by more than 10 per cent, with some investors concerned the company is overpaying for a junior explorer with a deposit that may turn out to be a disappointment.
History has shown that, especially in Red Lake, which is known for its erratic geology, buying early-stage companies can be risky. In 2008, Goldcorp Inc., a former high flier in the global gold industry, bought Gold Eagle Mines Ltd. for $1.5-billion. Like Great Bear, Gold Eagle had promising drill results, but no reserves. The acquisition ended in disaster for Goldcorp, which was unable to prove there were large mineable reserves in the ground.
Kinross is keen to point out that, unlike Goldcorp, which “panic bought” Gold Eagle, it took its time, and did its homework on a property that has already been drilled extensively.
Great Bear, which was co-founded by structural geologist Chris Taylor and Bob Singh, has drilled close to 800 holes at Dixie and identified five separate gold discoveries. Early work shows that a large chunk of the gold may be widely-dispersed and uniform.