Barrick Gold Corporation (ABX) received approval from the Australian Government under its foreign investment policy for Barrick's proposed acquisition of all of the issued and outstanding common shares of Equinox Minerals Limited.
On April 25, 2010, Barrick had entered into a support agreement with Equinox to acquire, through an all-cash offer, all of the issued and outstanding common shares of Equinox for C$8.15 per share, or a total of approximately C$7.3 billion.
The acquisition of Equinox would add a high quality, long-life asset to the company's portfolio and is consistent with the strategy of increasing gold and copper reserves through exploration and acquisitions. The transaction is expected to be accretive to cash flow and earnings on a per share basis. It does not dilute Barrick shareholders' gold exposure per share, and enhances copper exposure and leverage per share in a strong copper price environment. Combined with the Zaldivar mine and the Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world.
Recently, Barrick posted record first-quarter 2011 results driven by higher gold sales volumes and higher prices for both gold and copper. The first quarter reported a net income of $1.0 billion or $1.00 per share.
Adjusted net income was up 32% year over year to $1.0 billion or $1.01 per share compared with $763 million or 78 cents per share in the prior-year quarter, in line with the Zacks Consensus Estimate of $1.01.
Total revenue was $3.1 billion, up from $2.6 billion in the prior-year quarter, but below the Zacks Consensus Estimate of $3.2 billion.
Barrick faces stiff competition from AngloGold Ashanti Ltd. (AU) and Newmont Mining Corp. (NEM).
We maintain our Neutral recommendation on Barrick. Currently, it holds a Zacks #3 Rank (Hold) on the stock.
BARRICK GOLD CP (ABX): Free Stock Analysis Report
ANGLOGOLD LTD (AU): Free Stock Analysis Report
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