TVX shareholders give nod to merger with Inco Gold

A new, large gold producer came into being recently when shareholders of Consolidated TVX Mining voted overwhelmingly in Toronto to merge their company’s operations with those of Inco Gold to create TVX Gold (TSE). The new company, with interests in six mines in Canada, the U.S., Brazil and Chile, will turn out an estimated 350,000 oz. gold and gold equivalent this year and more than 400,000 oz. in 1992.

Nickel producer Inco (TSE), sole owner of Inco Gold, controls 62% of the new company (representing about 83 million shares), with TVX shareholders owning the remaining interest. (Inco’s stake was raised from 58% following the initial announcement of the merger last October.)

President of TVX Gold is Martin Robinson, a longtime Inco employee who was president of Inco Gold. Chairman of the new company is Eike Batista, who filled the same position with Consolidated TVX. The former president of Consolidated TVX, Ian Telfer, becomes executive vice-president and treasurer of TVX Gold.

Inco Gold and Consolidated TVX each bring interests in three producing gold mines. Telfer said TVX Gold comes into being with no financial obligations. The new company expects a weighted average cash operating cost of less than US$200 per oz. of gold equivalent. Telfer pointed out the oldest of the six mining operations was started up in 1987.

Inco Gold is contributing a 60% interest in Casa Berardi Mines, which produces gold in the Casa Berardi region of Quebec; a 50% interest in the company which owns the Crixas mine in Brazil operated by an affiliate of Anglo American Corp.; and a 50% interest in the Mineral Hill mine in Montana in which the joint venture partner is Homestake Mining (NYSE).

Also, Inco Gold is contributing interests in three major exploration plays in Canada: Wilanour and Musselwhite in northern Ontario, and High River in Manitoba.

From the TVX side comes a 23% interest in the Brazilia mine in Brazil operated by a RTZ Corp. affiliate; a 49% interest in the Novo Astro mine in Brazil; and a 50% interest in La Coipa gold-silver mine in Chile which is operated by Placer Dome (TSE). (As part of the merger deal, Consolidated TVX boosted its interest in La Coipa from 40% to 50% by purchasing a 10% interest in La Coipa owned by a Batista- related group of South American investors.)

Telfer listed a number of advantages of the merger from TVX’s point of view, including exposure to North American gold assets, access to Inco’s technical and operating expertise, and interests in four major gold deposits with long reserve lives.