Five Nevada mines affected

Monday, June 25, 2001 | 11:11 a.m.

The president of the Nevada Mining Association said today's announcement of the $2.3 billion merger of Barrick Gold Corp. and Homestake Mining Co. wasn't a surprise, given the depressed state of gold prices and the need for companies to consolidate their resources.

"They'll be gaining efficiencies through the elimination of duplication," said Russ Fields, president of the association that represents suppliers and contractors as well as many of Nevada's 59 mines, 100 wells and 14 geothermal plants. "They're looking for ways to become better poised for growth.

"With the combination of reserves and technical capability, there are companies looking for synergies to grow," he said. "Clearly, that's what occurred in this merger."

Fields said he doesn't expect mines to close as a result of the merger, but there could be some jobs lost through consolidation.

Barrick's Goldstrike operation near Elko has two mines, the Betze-Post with 1,333 company employees and 220 contracted employees, and the Meikle, with 468 employees and 60 contractors. Between the two mines, Goldstrike produced 2.45 million ounces of gold in 2000.

Homestake has interests in three active mines in the state, the largest of which is the Ruby Hill mine near Eureka, which began production in 1998.

It has 90 employees and produced 125,000 ounces of gold in 2000. Fields said even though Ruby Hill and Barrick's mines are all in Eureka County, he expects they'll continue to need separate management teams to run them because they are more than 100 miles apart.

Homestake also has a 50 percent interest in Smoky Valley Commons mine near Round Mountain, but its partner, Echo Bay Minerals, operates the facility. It also has a 33 percent interest in the Marigold mine, near Winnemucca, operated by Glamis Gold.

Prior to the merger, Homestake and Barrick had a partnership in the inactive Pinson mine, near Golconda in Humboldt County. The two companies consider it a future resource and have prospectors exploring for new reserves.

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