Canadian Mining Journal


GOLD: Barrick proposes all-share buyout of Newmont

Everybody it seems wants to create the world’s largest gold producer. (Image:

TORONTO – A subject of speculation last week, the takeover of Newmont Mining by Barrick Gold is now out in the open. That would make Barrick the world’s largest gold producer by far.

Barrick is offering an at market exchange ratio of 2.5694 of its shares for each Newmont share tendered.

“The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of Tier One gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering value,” said Barrick president and CEO Mark Bristow. He insists that synergies worth over US$7 billion will be realized.

Bristow says Barrick’s offer for Newmont is an option far superior for Newmont shareholders than the proposed Newmont-Goldcorp merger. The latter deal was launched last month and put a value of US$10 billion on Goldcorp and would create the world’s largest gold producer. Barrick’s offer for Newmont is valued at US$18 billion, but is contingent on Newmont dropping its plans to acquire Goldcorp.

For its part Newmont is telling its shareholders that Barrick’s offer represents a negative premium based on recent market prices as of the close of business on Feb. 22, 2019. The company stands by the Goldcorp takeover as being the best offer for its shareholders, one that could create more than US$2.5 billion in potential value creation. Newmont believes Barrick’s offer ignores risks and overstates rewards.

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