San Gold Chief Executive Officer Dale Ginn said his company is “not for sale” and is doing “just fine” as an independent entity.
“It’s only logical that the bigger companies are looking at the higher-quality juniors that are building resources as rapidly as we are,” Ginn said in an interview.

By Rob Delaney

Nov. 12 (Bloomberg) -- Bullion producers including Barrick Gold Corp. and Goldcorp Inc. may attempt to take over smaller companies such as Osisko Mining Corp. to boost output amid dwindling supplies and rising prices, mining executives said.
“I hear enough rumors out there and rumblings that I’d be shocked if something wasn’t coming up in the next two months,”Pierre Lassonde, a former president ofNewmont Mining Corp., the largest U.S. gold producer, said in an interview. “You’re going to see a number of companies disappear.”
Lassonde’s forecast echoes other executives and analysts expecting gold-mining companies valued at $10 billion or more to resume making acquisitions. Gold has gained 26 percent this year while the dollar is down 7 percent against a basket of six major currencies.
Osisko, a C$2.23 billion ($2.13 billion) company that received approval this year to develop a Quebec deposit with at least 6.3 million ounces of gold, is among the most likely targets, Paul Burchell, a Dundee Securities Corp. mining analyst in Toronto, said in an interview. Allied Nevada Gold Corp. and San Gold Corp. also are likely targets, Burchell said. He declined to speculate when the offers may be made.
Gold prices reached a record high of $1,123.40 today, adding pressure on producers to increase reserves through acquisitions because they haven’t found any “significant” deposits in almost 15 years, Lassonde, who is now chairman ofFranco-Nevada Corp., said Nov. 10.
‘Top Three’
“We’re always top three in that debate” about which company is next, Osisko Chief Executive Officer Sean Roosen said in an Oct. 27 interview. “We will either build the mine or get paid for one. We’re shareholders first and management second.”
San Gold Chief Executive Officer Dale Ginn said his company is “not for sale” and is doing “just fine” as an independent entity.
“It’s only logical that the bigger companies are looking at the higher-quality juniors that are building resources as rapidly as we are,” Ginn said in an interview.
The value of completed gold mining acquisitions so far this year is about $8.15 billion, compared with $19.3 billion in 2008 and $13.5 billion in 2007, according to Bloomberg data.
“If an offer came in that made sense for shareholders, we would obviously entertain it,” Tracey Thom, an Allied Nevada spokeswoman, said in an interview.
Barrick fell 76 cents, or 1.7 percent, to C$44.31 at 11:31 a.m. in Toronto Stock Exchange trading. Vancouver-based Goldcorp dropped 28 cents to C$45.99. Montreal-based Osisko declined 5 cents to C$7.83. San Gold, based in Bissett, Manitoba, slid 3 cents to C$2.97. The Philadelphia Stock Exchange Gold & Silver Index has climbed 44 percent this year, led by Freeport-McMoRan Copper & Gold Inc.
Merger Value
Mergers between gold companies with market values exceeding $10 billion are unlikely because they would be “compounding their problem” of declining gold resources relative to the amount in production, Lassonde said.
Goldcorp expects to produce 2.4 million ounces of gold this year compared with 2.32 million ounces in 2008.
“Your production profile will fall off if you don’t add new things, and so we’re constantly on the lookout for new things,” Goldcorp Chief Executive Officer Chuck Jeannes said in a Nov. 5 interview. “You’ll continue to see a focus on asset- based transactions, where companies are acquiring single-asset companies or single assets.”
Barrick expects to produce 7.2 million to 7.6 million ounces of gold this year, compared with 7.66 million ounces in 2008, the Toronto-based company said in its earnings announcement last month.
‘Always Looking’
“We’re always looking at how we can add better-quality assets; how we can identify deposits as early as possible whether through exploration or acquisition,” Barrick Chief Executive Officer Aaron Regent said in an Oct. 29 interview. “I think where we can create more value is through earlier-stage projects. We’re of a size where we have to look at as many things as possible.”
Regent and Jeannes declined to say which companies they’re interested in and when they might make offers.
Gold won’t fall below $1,000 an ounce again as central banks print money to help fund budget deficits, Marc Faber, publisher of the Gloom, Boom & Doom report, said at a conference yesterday in London.
The metal is headed for the ninth straight annual gain as demand for a store of value other than the greenback led investors to increase holdings of gold coins and exchange-traded funds backed by bullion.