Canadian miner bids for oil and gas company

OTTAWA: Canadian miner Barrick Gold Corporation made a hostile takeover bid on Monday for oil and gas company Cadence Energy Inc, hoping it said to mitigate its soaring energy costs.

"We are confronting the energy cost challenges facing our industry through this long-term economic hedge of about one-quarter of our direct oil consumption and a significant portion of our direct natural gas consumption," Jamie Sokalsky, Barrick Gold's chief financial officer, said in a statement.

The acquisition is expected to form a "long term strategy to economically hedge oil exposure at lower rates than currently available in the forward market," the company said.

As well, the 354 million US dollar acquisition is expected to have break-even cash flow at oil prices that are less than one-half of current market prices, it said.

Cadence produces approximately 3,600 barrels of oil per day, over 70 percent of it light crude. It was previously in merger talks with Daylight Resources Trust.

As part of its energy strategy, Barrick Gold, the world's largest gold miner, has also purchased a natural gas power plant in Nevada, and invested 70 million dollars in a wind farm in Chile, both near its mines.