Placer extends AurionGold offer (October 16, 2002)

Vancouver — With AurionGold now recommending that shareholders accept Placer Dome‘s (PDG-T) $1.2 billion takeover offer, the bid, which had already been extended nine times, has been extended yet again, this time to Nov. 1.

The latest extension allows shareholders adequate time, following payment of the special dividend, to consider their position in light of the change in recommendation.

Over the week-end, the Australian miner reversed its rejection of the takeover bid by telling shareholders to accept the hostile offer and declaring a special dividend of A10.>P>”Each of the directors of AurionGold recommends that shareholders either accept Placer’s offer or sell their shares on the market while the offer remains open,” says AurionGold’s managing director, Terry Burgess.

The about-face effectively delivers Australia’s largest gold producer, capable of mining 1 million oz. per year, to Placer, which has steadily gained a bigger piece of the Aussie company since launching the offer in May.

With Placer already holding 45% of its shares, AurionGold said it was no longer in the best interests of its shareholders to reject the offer of 17.5 of its shares for every 100 AurionGold shares, plus A28 cash. The special dividend, to be paid on Oct. 24, reduces Placers’ cash contribution to A18.

The recent decision also prompted the two companies to waste no time in changing the look of AurionGold’s board of directors. Four of Placer’s nominees, David Karpin, Arthur Hood, Bob Humphris and Pat Sankey, were immediately named to the existing eight person board and following AurionGold’s annual general meeting on October 30, Terry Burgess will step down as Managing Director, along with five current directors.

The combined company will be the fifth-largest gold miner in the world, with interests in 17 gold mines on four continents and significant land positions in key gold-producing regions in Western Australia, Nevada, northern Ontario and South Africa. The new company would have annual production of 3.8 million oz. gold.

Placer, which produced 2.8 million oz. gold last year and has assets of about US$2.7 billion, expects to generate at least US$25 million in annual savings from combining the two companies.