Harmony Gold CEO Sees Opportunity in Barrick-Newmont Merger Talks

It stands to reason that the merger currently in talks between Barrick Gold Corp. and Newmont Mining Corp., if it goes through as planned, would have to be beneficial to the two companies involved. (After all, if it wasn’t beneficial, what would be the point of the merge in the first place?) But how will it affect the gold industry as a whole? It could turn out to be a very good thing – according to Graham Briggs, CEO of South African gold mining outfit Harmony Gold Mining Co, the merger may be a prelude to a lot of opportunity ahead.

As Businessweek reports, Briggs has noted that a lot of opportunity in the way of spinoffs may stem from the troubled merger Barrick and Newmont:

“Look at the situation in North America where two big guys are talking about getting together with possible spinoffs,” Chief Executive Officer Graham Briggs said today on a conference call. “We see this as maybe a potential opportunity in the gold space.”

Where is this opportunity coming from? It would appear that the merger between Barrick and Newmont is not exactly going smoothly, and Barrick could be looking to get rid of some of its current properties in order to make the merger happen:

Barrick, the world’s biggest gold producer, discussed buying Newmont, the second-largest, last month before both companies said April 28 talks were terminated and exchanged a series of statements accusing each other of scuppering the deal. Barrick is working on plans for a range of market scenarios including trimming, closing or expanding certain operations.

If it does go that route, mining outfits like Harmony Gold Mining Co. will be waiting in the wings to snap up any advantageous properties and operations that could end up on Barrick’s chopping block.

It’s been a good day for Harmony, with a rise in gold prices pushing the company’s quarterly assets into an incline despite decreased production. If Harmony is able to increase production through the acquisition of new properties, its year overall could get even better still.