CANADA STOCKS-Barrick deal drags TSX lower, Equinox surges

Mon Apr 25, 2011 10:43am EDT
 
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 *TSX falls 75.49 points, or 0.5 pct, to 13,896.53
 *Barrick to buy Equinox for more than C$7 billion
 *Six of index's 10 sectors weaker
 (Updates with details, comments)
 By Claire Sibonney
 TORONTO, April 25 (Reuters) - Toronto's main stock index
was lower on Monday morning as Barrick Gold Corp ABX.TO
dropped sharply, pulling down other gold miners with it, after
it struck an all-cash deal to buy Australian copper miner
Equinox Minerals EQN.TO.
 Barrick, the world's largest gold miner, plunged almost 6
percent to C$49.99 after it announced the Equinox takeover for
more than C$7 billion, topping a takeover offer from China's
Minmetals Resources 1208.HK by 16 percent. [ID:nN25193391]
Barrick was the index's top decliner.
 Equinox surged 12 percent to C$8.38 in early trade.
 "Barrick is off because it's taking up a lot of its cash,"
said Gavin Graham, president of Graham Investment Strategy.
 "It's obviously good news longer term for the Canadian
market but short term the sell-off in Barrick is dragging
things down."
  Base-metal miners rallied 1.7 percent, while gold miners
were broadly weaker, down 2.1 percent, despite spot gold
hitting a record high above $1,518 an ounce and silver moving
closer to its 1980 record peak. [GOL/]
 "When Barrick says 'yes, we think Equinox is worth 'x',
that certainly gives a big boost to the valuations that have
been based on copper miners, base metal miners," Graham said.
 He said that rising energy costs were also weighing on the
shares of precious metal miners despite record high gold
prices.
Goldcorp Inc G.TO was down 1.6 percent at C$52.24, while
base metals producer First Quantum Minerals FM.TO shot up 3.4
percent to C$134.40.
At 10:25 a.m. (1425 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 75.49 points, or
0.54 percent, at 13,896.53. Six of the index's 10 main groups
were weaker, including energy shares, which slipped 0.8 percent
as U.S. crude prices reversed earlier gains. [O/R]
 Suncor Energy SU.TO was off 0.3 percent at C$43.06, while
Canadian Natural Resources CNQ.TO retreated 1.1 percent to
C$43.96.
 ($1=$0.95 Canadian)
  (Reporting by Claire Sibonney; editing by Peter Galloway )