news-details

Barrick Announces Agreement to Acquire Equinox

April 25, 2011

C$8.15 per share cash offer recommended by Equinox Board

All amounts expressed in US$ unless otherwise indicated

Highlights

Equinox realizes compelling value

  • Equinox signs support agreement with Barrick for C$8.15 per share all-cash recommended offer
  • 30% premium based on Equinox’s closing share price on the Toronto Stock Exchange on February 25, 2011 (the last trading day before announcement of Equinox’s bid for Lundin)
  • superior offer representing a 16% premium to the value of the proposed Minmetals offer
  • no financing condition; Barrick has sufficient cash and committed financing in place to fund the acquisition
  • unanimously recommended by Equinox’s Board of Directors
  • Equinox will withdraw its bid for Lundin

Cash flow and earnings accretive for Barrick shareholders

  • proven, producing mine with strong growth potential
  • utilizes Barrick’s balance sheet capacity
  • historically low interest rates on debt financing

The addition of the high-quality, long-life Lumwana asset

  • long mine life in a mining friendly jurisdiction
  • provides entry into highly prospective Zambian copper belt

Consistent with Barrick’s strategy of increasing gold and copper reserves through exploration and acquisitions

  • attractive supply and demand fundamentals for copper for the foreseeable future
  • 5.7 billion pounds of copper reserves, including 4.5 billion pounds of copper reserves at Lumwana and 1.2 billion pounds of copper reserves at Jabal Sayid, plus an additional 5.5 billion pounds of inferred copper resources at Lumwana1
  • scarcity of opportunities of this size and quality
  • maintains gold exposure per share and enhances copper leverage per share
  • financial flexibility remains to fund internal growth projects


TORONTO, April 25, 2011 — Barrick Gold Corporation
(NYSE: ABX)(TSX: ABX) ("Barrick" or "the Company") announced today that it has entered into a support agreement with Equinox Minerals Limited (TSX: EQN)(ASX: EQN)("Equinox") for Barrick to acquire, through an all-cash offer, all of the issued and outstanding common shares of Equinox (including the shares represented by Equinox's CHESS Depositary Interests) by way of a friendly take-over offer (the "Offer"). The Offer is for C$8.15 per Equinox share in cash, or a total of approximately C$7.3 billion. The Offer represents a 30% premium based on Equinox's closing share price on the Toronto Stock Exchange on February 25, 2011 (the last trading day before Equinox announced its intention to make a take-over bid for the common shares of Lundin Mining Corporation). The Offer also represents a 16% premium over the per share price under the offer for Equinox proposed by Minmetals Resources Ltd. on April 3, 2011 (which offer has not yet commenced).

Aaron Regent, President and CEO of Barrick said: "The acquisition of Equinox would add a high-quality, long-life asset to our portfolio and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions. The transaction is expected to be immediately accretive to cash flow and earnings on a per share basis. It does not dilute our shareholders' gold exposure per share, and it enhances copper exposure and leverage per share in a strong copper price environment. Combined with our Zaldivar mine and 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. This will be in addition to our targeted growth in annual gold production to 9 million ounces within the next five years."

The Board of Directors of Equinox, after consultation with its financial and legal advisors, has unanimously approved entering into the support agreement and recommends that Equinox shareholders tender to the Offer. Each of CIBC World Markets Inc., Goldman Sachs & Co., and TD Securities Inc., the financial advisors to Equinox, has provided a verbal opinion to the effect that, as of the date of such opinions and subject to the assumptions, limitations, and qualifications stated in such opinions, the consideration proposed to be paid to the holders of Equinox common shares (other than Barrick and its affiliates) pursuant to the Offer is fair from a financial point of view to such holders.

Craig Williams , President and CEO of Equinox said: "We are very pleased to support this Offer. The Offer allows our shareholders to realize immediate value and also positions our operations and employees as part of a world class mining company. We believe this Offer is superior to the public proposal made by Minmetals in terms of certainty and value. Given the immediate value creation opportunity, we are recommending our shareholders tender to the Barrick Offer."

The support agreement between Barrick and Equinox provides for, among other things, a non-solicitation covenant on the part of Equinox subject to customary "fiduciary out" provisions, a right in favor of Barrick to match any superior proposal and a payment to Barrick of a termination fee of C$250 million in certain circumstances, including if Equinox accepts a superior proposal.

The Offer is not subject to a financing condition. Barrick has sufficient cash resources and committed financing to fund this acquisition. The $5.0 billion financing is comprised of a bridge loan and a revolving credit facility underwritten by RBC Capital Markets and Morgan Stanley Senior Funding and is in addition to Barrick's existing credit facility of $1.5 billion and cash balance of about $4.0 billion as at December 31, 2010.

The Offer, which will be made through a subsidiary of Barrick, is expected to commence on April 26, 2011 and a take-over bid circular and related documents will be mailed to shareholders in accordance with applicable laws (all subject to the terms and conditions of the support agreement). The Offer will be open for acceptance for a period of not less than 35 days from its commencement and will be conditional upon, among other things, valid acceptances of the Offer in respect of shares representing (together with shares owned by Barrick) not less than 66 2/3% of the Equinox shares on a fully diluted basis. In addition, the Offer will be subject to certain customary conditions, including receipt of relevant regulatory approvals and the absence of a material adverse change with respect to Equinox. Once the 66 2/3% acceptance level is met, Barrick intends to take steps available to it under applicable law to acquire any outstanding Equinox shares. The Company currently owns 18.2 million shares of Equinox, representing about 2% of its shares on a fully diluted basis.

Morgan Stanley & Co. Incorporated and RBC Capital Markets are acting as financial advisors to Barrick and Ogilvy Renault LLP, Sullivan & Cromwell LLP and Clayton Utz are providing legal advice. CIBC World Markets Inc., Goldman Sachs & Co., and TD Securities Inc. are acting as financial advisors to Equinox and Osler, Hoskin & Harcourt LLP is providing legal advice.

1 Reserves and resources as reported in Equinox's 2010 Annual Information Form. Lumwana has a global copper resource, at a 0.2% copper cut-off grade, of 322 million tonnes at 0.73% copper for 5.2 billion pounds (measured and indicated) and 561 million tonnes at 0.63% copper for 7.8 billion pounds (inferred). From the global resource, a proven and probable reserve of 299 million tonnes at 0.68% copper for 4.5 billion pounds has been defined. Jabal Sayid (Lode 2 + Lode 4) has a global copper resource, at a 0.8% copper cut-off grade, of 26 million tonnes at 2.5% copper for 1.4 billion pounds (measured and indicated) and 5.1 million tonnes at 1.5% copper for 172 million pounds (inferred). From the global resource, a proven and probable reserve of 24.4 million tonnes at 2.2% copper for 1.2 billion pounds has been defined.

Conference call and webcast

Barrick will host an analyst and investor conference call and webcast on Monday, April 25 at 9:00 am Canadian/US Eastern Time, 9:00 pm Perth time.

  • North American callers dial: 800-926-7563
  • International callers dial: 212-231-2922

A live webcast of the Conference Call will be accessible on Barrick's website at www.barrick.com.

The Conference Call will be available for replay until May 2, 2011 by calling 800-558-5253 for North American callers and for International callers, 416-626-4100, Reservation #21521912.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or an invitation to sell, any of the securities of Equinox. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada. Furthermore, the information contained in this press release does not constitute financial product advice. It has been prepared without reference to the investment objectives, financial situation, taxation situation and particular needs of any individual Equinox shareholder. Equinox shareholders should consider consulting with their investment, financial, taxation or other professional advisor before taking any action in relation to their investment in Equinox.

Notice to Shareholders in the United States

The Offer is made in the United States with respect to securities of a Canadian foreign private issuer in accordance with Canadian tender offer rules. Shareholders resident in the United States should be aware that such requirements might be different from those of the United States applicable to tender offers under the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


About Barrick

Barrick Gold Corporation is a leading Toronto-based mining company with a portfolio of 25 operating mines and six projects on four continents. Barrick trades on the Toronto and New York Stock Exchanges and employs more than 20,000 people worldwide. The Company was ranked as a global leader in social and environmental responsibility for the third consecutive year in 2010 by the Dow Jones Sustainability World Index. Barrick is also listed on the NASDAQ Global Sustainability Index of the world's top 100 companies.

About Equinox

Equinox Minerals Limited is an international mining company dual-listed on the Toronto and Australian Stock Exchanges.

Equinox has two primary assets, the Lumwana mine in Zambia (100%-owned) and the Jabal Sayid development project in Saudi Arabia (70%-owned; Equinox is in the process of acquiring the remaining 30%).

Lumwana, located in the highly prospective Zambian copper belt, began production in 2008. It hosts copper reserves of 4.5 billion pounds and inferred copper resources of 5.5 billion pounds. Lumwana produced 323 million pounds of copper in 2010 and there is future potential to expand production.

A feasibility study on the Jabal Sayid project was completed in 2009. The project has copper reserves of 1.2 billion pounds. Average life of mine annual production at Jabal Sayid is expected to be over 100 million pounds of copper.

For information on Equinox please refer to Equinox's website at www.equinoxminerals.com.

 

BARRICK INVESTOR CONTACT:
Deni Nicoski
Vice President, Investor Relations
(416) 307-7410
dnicoski@barrick.com
  BARRICK MEDIA CONTACT:
Andy Lloyd
Senior Manager, Communications
(416) 307-7414
alloyd@barrick.com

 

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this press release, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", "anticipate", "contemplate", "target", "plan", "continue", "budget", "may", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of gold, copper or certain other commodities (such as fuel and electricity); inaccuracies or material omissions in Equinox's publicly available information or the failure by Equinox to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information; the ability of the Company to complete or successfully integrate an announced acquisition proposal; legislative, political or economic developments in the United States, Canada, Zambia, Saudi Arabia or elsewhere; operating or technical difficulties in connection with mining or development activities; availability and costs associated with mining inputs and labor; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.

Except as otherwise indicated, the information concerning Equinox contained in this press release has been taken from or is based upon Equinox's and other publicly available documents and records on file with Canadian securities regulatory authorities and other public sources. Neither Barrick nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, or for any failure by Equinox to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information, but which are unknown to Barrick.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, further events or otherwise, except as required by applicable law.

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