GOLD MERGER-GO-ROUND – Barrick steps into NovaGold/ Pioneer fray

TORONTO - Last week our readers learned that NOVAGOLD and PIONEER METALS (both of Vancouver) had been squabbling ov...
TORONTO - Last week our readers learned that NOVAGOLD and PIONEER METALS (both of Vancouver) had been squabbling over the Grace gold-copper claims in British Columbia. Moreover, NovaGold made a hostile takeover bid for Pioneer in June 2006, and the two companies are at odds over that proposal.

While NovaGold and Pioneer were wrapped up in their concerns, Toronto's BARRICK GOLD made takeover offers for both of them. The global gold giant has offered to acquire all of Pioneer's shares in a deal worth Cdn$65.0 million. Barrick is offering Cdn$1.00/share compared with the Cdn$0.57 rate offered by NovaGold. Pioneer supports Barrick's offer, and the deal looks very friendly.

NovaGold management is telling its shareholders to resist Barrick's US$1.29-billion or US$14.50/share offer for NovaGold. President & CEO Rick Van Nieuwenhuyse calls Barrick's unsolicited move "opportunistic". Instead, he has extended NovaGold's offer for Pioneer until Aug. 11, 2006, but did not raise his offer. (Visit

For Barrick (, gaining control of the two smaller companies would increase its measured and indicated gold resources in North America by 54%. NovaGold holds a 30% interest in the Donlin Creek gold project, and Barrick controls the other 70% thanks to its purchase of Placer Dome. Donlin Creek is estimated to contain 14.8 million oz of gold in measured and indicated resources plus 13.6 million oz of gold in inferred resources. NovaGold is the sole owner of the Galore Creek gold deposit, estimated to contain a measured and indicated gold resource of 6.0 million oz and an inferred resource of 7.2 million oz; as well, there may be as much as 148.9 million oz of silver and 11.8 billion lb of copper. NovaGold has three other gold projects in Alaska, several early stage exploration projects and $200 million in cash. Pioneer ( owns the past-producing Puffy Lake gold mine and an interest in the Nokomis Lake gold project in Manitoba, an interest in the Grace and Fish Lake gold-copper properties in British Columbia, and an interest in the Bonito gold-copper project in New Mexico.

Were I a betting woman, I'd put my money on Barrick to acquire both NovaGold and Pioneer.


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