Market Consolidation for gold mining companies has been coming for some time and this type of takeover is to be expected, but will it happen?

If you are a stockholder of Glamis then its champagne time, but if you are a stockholder in Gold Corp (GG) then the day does not look so bright.

This move has been described as one expensive company buying another expensive company. We could say that it is early days for this transaction and we might get a Barrick or a Newmont joining the fray with yet a bigger offer. My money says that won’t happen and if it doesn’t we have to question the price being paid by Gold Corp.

If I were a holder of Gold Corp then I would want to be able to vote on this move and not be dictated to by board. On the other hand if we owned Glamis we would cash in and run with our glamorous profits while they are there to be taken.

Time will reveal all to us.

On the subject of takeovers we think that we will see a lot more action and we expect at least two of our stocks to be in the thick of it. They are Agnico-Eagle Mines and Kinross Gold Mines. If you have them in your portfolio you might want to hang on for a piece of hostile Merger and Acquisition activity coming to a screen near you shortly.

05 September 2006