Newmont’s Tanami operation in the Northern Territory. Image: Newmont Mining.
BY ELIZABETH FABRI
NEWMONT Mining has entered a deal to acquire Canadian gold company Goldcorp for $US10 billion.
The acquisition marked the second large-scale merger in the gold industry in the last six months following Barrick Gold’s landmark purchase of Randgold Resources in September 2018 for $US6 billion.
Under the deal, the two miners would form Newmont Goldcorp; the world’s largest gold miner by output, with a portfolio of assets across North and South America, Canada, Australia and Africa.
Newmont would acquire each Goldcorp share for 0.3280 of a Newmont share, with Newmont and Goldcorp shareholders to own 65 per cent and 35 per cent of the combined entity respectively.
Goldcorp currently operated four mines in Canada, one in Argentina, one in Mexico, as well as two joint venture mines, while Newmont’s operations included Boddington, KCGM and Tanami in Australia, as well as projects in Ghana, North and South America.
Together the companies aimed to produce between six and seven million ounces of gold per year for at least a decade.
Newmont chief executive Gary Goldberg said the deal would create “the world’s leading gold business with the best assets, people, prospects and value creation opportunities”.
“We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces over a decades-long time horizon, the sector’s largest gold Reserve and Resource base, and a leading project and exploration pipeline,” Mr Goldberg said.
“We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven Full Potential continuous improvement program.
“The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share.”
Goldcorp president and chief executive David Garofalo said both teams were “fully committed” to delivering on the transaction’s value proposition for all stakeholders.
“Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production,” Mr Garofalo said.
