Centerra May Make C$3 Billion of Gold Acquisitions in Next Year
By Millie Munshi
June 11 (Bloomberg) -- Centerra Gold Inc., the owner of the Kumtor mine in Kyrgyzstan, said it may spend as much as C$3 billion ($2.9 billion) buying assets in the next year to boost production.
“We would be interested in something that is approximately our size,” Centerra Chief Executive Officer Stephen Lang said in a telephone interview yesterday. “We are looking for potential acquisitions that are in the late stages of exploration” and gold-mining projects that have recently started production, he said.
The Toronto-based company is looking to pay for assets in cash, stock or a combination of both and will also consider forming “small” joint ventures, Chief Financial Officer Jeffrey Parr said.
The number and value of gold-mining acquisitions has grown this year as the price of the metal climbed. There have been 212 deals announced in 2010 with a combined value of $16.8 billion, according to data compiled by Bloomberg, compared with 175 deals worth $6.09 billion a year earlier.
Gold futures touched a record $1,254.50 an ounce in New York this week. The metal has advanced 28 percent in the past 12 months as investors sought it as a haven.
Centerra fell 8 cents, or 0.6 percent, to C$12.65 in Toronto trading yesterday. The shares are up 17 percent this year, valuing the company at C$2.97 billion. Shares of Canada’s Barrick Gold Corp., the world’s biggest gold producer, gained 6.7 percent in 2010, while Greenwood Village, Colorado-based Newmont Mining Corp. advanced 19 percent.
Asian Expansion
Kumtor produced more than 525,000 ounces of gold last year, according to Centerra’s website. The company, which also operates a mine in Mongolia, plans to keep expanding production in Asia.
“There’s a level of competition for assets in North America, South America and Australia,” Lang said. “While it might work, our chances of success are better in Asia.”
Gold futures for August delivery dropped $7.70, or 0.6 percent, to $1,222.20 an ounce on the Comex in New York yesterday. The metal is up 11 percent this year.
“We’re pretty optimistic on the gold price,” Lang said. “It’s not really too surprising, given the general financial conditions worldwide, to see positive movements in gold and we would expect to see more of it.”
--Editors: Simon Casey, Steven Frank
To contact the reporters on the story: Millie Munshi in New York at mmunshi@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
June 11, 2010, 1:22 AM EDT
June 11 (Bloomberg) -- Centerra Gold Inc., the owner of the Kumtor mine in Kyrgyzstan, said it may spend as much as C$3 billion ($2.9 billion) buying assets in the next year to boost production.
“We would be interested in something that is approximately our size,” Centerra Chief Executive Officer Stephen Lang said in a telephone interview yesterday. “We are looking for potential acquisitions that are in the late stages of exploration” and gold-mining projects that have recently started production, he said.
The Toronto-based company is looking to pay for assets in cash, stock or a combination of both and will also consider forming “small” joint ventures, Chief Financial Officer Jeffrey Parr said.
The number and value of gold-mining acquisitions has grown this year as the price of the metal climbed. There have been 212 deals announced in 2010 with a combined value of $16.8 billion, according to data compiled by Bloomberg, compared with 175 deals worth $6.09 billion a year earlier.
Gold futures touched a record $1,254.50 an ounce in New York this week. The metal has advanced 28 percent in the past 12 months as investors sought it as a haven.
Centerra fell 8 cents, or 0.6 percent, to C$12.65 in Toronto trading yesterday. The shares are up 17 percent this year, valuing the company at C$2.97 billion. Shares of Canada’s Barrick Gold Corp., the world’s biggest gold producer, gained 6.7 percent in 2010, while Greenwood Village, Colorado-based Newmont Mining Corp. advanced 19 percent.
Asian Expansion
Kumtor produced more than 525,000 ounces of gold last year, according to Centerra’s website. The company, which also operates a mine in Mongolia, plans to keep expanding production in Asia.
“There’s a level of competition for assets in North America, South America and Australia,” Lang said. “While it might work, our chances of success are better in Asia.”
Gold futures for August delivery dropped $7.70, or 0.6 percent, to $1,222.20 an ounce on the Comex in New York yesterday. The metal is up 11 percent this year.
“We’re pretty optimistic on the gold price,” Lang said. “It’s not really too surprising, given the general financial conditions worldwide, to see positive movements in gold and we would expect to see more of it.”
--Editors: Simon Casey, Steven Frank
To contact the reporters on the story: Millie Munshi in New York at mmunshi@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
June 11, 2010, 1:22 AM EDT
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