THE blockbuster merger of Barrick Gold with Randgold Resources announced yesterday could trigger a fresh wave of consolidation in the world’s gold mining sector, said Bloomberg News citing analysts.
The newswire cited Michael Siperco, an analyst at Macquarie Capital Markets, as saying the $18.3bn deal may see “… wave of consolidation we’ve waited for”. Barrick’s acquisition may spur more interest in deals “… or at least cause the market to revisit the thesis,” he told Bloomberg News.
Mark Bristow, CEO of Randgold who is to become president and CEO of the enlarged Barrick/Randgold union, said the company may consider selling certain non-core assets. This would create buying opportunities for other companies, Shree Kargutkar, a portfolio manager for Sprott Asset Management, told Bloomberg.
The transaction may also revive speculation Barrick could revisit a combination with Newmont Mining after talks between the two collapsed in 2014. “It’s a topic for conversation – whether the Barrick/Newmont tie-up is finally dead or just deferred,” said Siperco. “That could change” and “… you could see alternative offers emerge for Randgold,” he told the newswire service.
