The world's seventh-biggest gold producer will be created in the nearest future, it will cost $2 billion for three canadian gold companies agreed to merge. They are Kinross Gold Echo Bay Mines and TVX Gold.
TVX is paying US$180 million to buy out the 49.9 per cent stake in its TVX Newmont Americas joint venture held by Newmont Mining, the world's biggest gold producer.
Newmont gave its backing to the merger, which is also supported by the boards of all three companies joining forces.
The merged company will have annual gold production of 2 million ounces. It will also be the only major North American primary gold producer with a non-hedging policy, with less than 5 per cent of its reserves hedged, meaning it can take full advantage of any further upside in the gold price. About two-thirds of annual production will be in the US and Canada.
The combination of the three companies will create the premier North American senior gold company for those investors seeking maximum leverage to the gold price in a gold company with superb liquidity. The deal would produce annual after-tax savings of US$15 million. The planned merger is the latest in a wave of worldwide consolidation in the gold industry as companies try to become leaner and lock in low-cost reserves.