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Monday, 4th September 2006 (4773 views)

Two of the largest gold miners in the world have agreed to amalgamate in order to form one of the world's largest companies in its field.

Canadian corporation Goldcorp and Glamis Gold, based in Reno, Nevada, have agreed to the $21.3 billion transaction and the two companies' joint ventures will take the Goldcorp name.

The combined market strength of Goldcorp will disturb the upper echelons of the gold mining industry, by making the new company one of the lowest cost producers on the market.

With an output that is estimated at around 2.5 million ounces per year, the company will have around 1.8 million ounces produced at total cash costs of under $100 an ounce.

With gold currently trading above $600 an ounce on world markets, the company's profitability will be very high, analysts said.

In terms of its global market position, the company will still sit behind industry giants Barrick, AngloGold Ashanti and Newmont but will overtake another of the larger corporations, Kinross Gold.

The merger is expected to be completed by November 2006.

 

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