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Gold Fields to buy Yamana to create sector’s fourth-biggest miner.

UcoOnca

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Almost a decade after it hived off the bulk of its South African assets into the creation of Sibanye, venerable SA mining group Gold Fields Limited has delivered a statement of great intent through the acquisition of a Canadian peer for more than R100bn. The acquisition, a stock-only deal, will enlarging the Gold Fields issued equity by 39%. It came as an unpleasant shock to Gold Fields’ current owners who knocked 11% off the share price, dropping the price to a three month low. The South African company, now led by former AngloPlatinum CEO Chris Griffith, was founded during the Witwatersrand Gold Rush of 1887, and was the bullion-vehicle of Kimberley diamond magnate Cecil John Rhodes. Its only remaining SA asset is South Deep, the long-life, deep-level and highly mechanised gold mine once owned by the late Brett Kebble. It is one of the world’s biggest gold producers and is based in Gauteng to the south west of Soweto between Carletonville and Vereeniging. Here’s the report from our partners at the FT. – Alec Hogg

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Voodoo

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I think the deal is a pretty good looking one. Although, it would be better if I owned AUY instead of GFI today. Oh well.
 

Goldfinger

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Hmm. I own a fair amount amount of AUY stock, but a ton of Jan 23 $3 call options. Not real sure what to do with those now.
 

Voodoo

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Hmm. I own a fair amount amount of AUY stock, but a ton of Jan 23 $3 call options. Not real sure what to do with those now.

I think I'd be tempted to just take that gain. I can say I just bought a Jan 23 $8 call on GFI. I think their management has been doing a pretty decent job.
 

ZZZZZ

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There just aren't many mid-tiers like Yamana left out there ripe for the picking. The majors have got to become more aggressive lower down the food chain.: the juniors.

Just my 7 cents (2 cents after taxes and inflation).
 
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Goldfinger

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I think I'd be tempted to just take that gain. I can say I just bought a Jan 23 $8 call on GFI. I think their management has been doing a pretty decent job.
I’ve got a sell order for a small chunk. The thing is, “the gain” just isn’t that much really since GFI has been selling off today, which then in turn makes me wonder (especially if it continues) if another bidder may just show up. To ZZZZZ’s point, there just aren’t many mid-tiers out there.
 

Voodoo

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I’ve got a sell order for a small chunk. The thing is, “the gain” just isn’t that much really since GFI has been selling off today, which then in turn makes me wonder (especially if it continues) if another bidder may just show up. To ZZZZZ’s point, there just aren’t many mid-tiers out there.

I haven't seen if the price was fixed or not. I believe that the price was fixed as of the last 10 trading days of GFI price. But if you are only getting 0.6 shares then that should hurt the AUY price as GFI declines.