What's going on?

Gold-mining firm Gold Fields� deal to buy rival Yamana Gold seemed to be in tatters this week.

What does this mean?

Gold Fields and Yamana seemed inseparable back in balmy late spring, cozying up in a deal that would see Gold Fields buy its rival, branch out into new countries, and become the world�s fourth-biggest gold miner in a single stroke. But it turns out their relationship was actually on rocky ground, with Gold Fields fighting to convince its shareholders to warm to the match.

Gold Fields� precious metal rivals Pan American and Agnico Eagle were plotting in the meantime, and last week they swooped in to woo Yamana with a joint bid that came in about 15% higher than the original. Gold Fields said it wouldn�t compete, and Yamana � clear-eyed and unsentimental � quickly announced it would encourage shareholders to vote against Gold Fields� offer.

Why should I care?

For markets: Flash the cash.
Here�s the thing: after share price movements in recent days, the value of the two offers were pretty much on par at the start of this week. The real sticking point here, then, might�ve been the type of deal. See, Gold Fields� proposal was an all-share deal, but those shares have lost about 40% of their value since the announcement of the offer in May. Agnico-Pan American�s offer, meanwhile, was made up of cash and stock � that cash portion being a safer short-term bet these days. So if Gold Fields wants to win Yamana back, it might have to put some money on the line.

The bigger picture: Gold�s in the pits.
The battle to acquire Yamana sheds some light on the less-than-glittering gold industry. See, the strong dollar and rising interest rates are hitting gold�s price, which � on top of swelling costs � is dimming gold�s once-shining revenues. Add in the fact that new gold deposits are thin on the ground, and it�s no wonder that miners are looking to acquisitions to shore up income and production.