Newmont to create top gold producer with $US10bn Goldcorp takeover

The Super Pit, half owned by Newmont Mining.

Newmont Mining has secured a $US10 billion ($13.9 billion) acquisition of Goldcorp in a deal that will form a world-leading gold producer.

The stock-for-stock agreement will combine the two gold miners into Newmont Goldcorp, a new company that will own a portfolio of operations, projects, exploration opportunities and reserves across the globe.

It is the latest major consolidation in the global gold industry in recent months, following Barrick Gold’s $US6.5 billion deal to acquire Randgold Resources that was announced last September.

In Australia, Newmont owns half of the Kalgoorlie Super Pit, the Boddington gold mine in Western Australia, and the Tanami operation in the Northern Territory. The United States-based company also owns producing operations in Africa and the Americas.

Canada’s Goldcorp, meanwhile, is focused on the Americas with producing assets in Canada, Argentina and Mexico.

The companies plan to combine these mines to target steady production of 6-7 million ounces of gold a year over the coming decades.

Newmont chief executive officer Gary Goldberg said the combination 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 6-7 million ounces over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline,” Goldberg said.

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance.”

Image: Newmont / Goldcorp.

 

Newmont expects to acquire each Goldcorp share for 0.3280 of each of its stock, valuing the target at $US10 billion.

The combined group would also have the largest reserves and resources in the global gold industry, according to the companies.

It would be based in Denver, Colorado with regional offices in Perth (Western Australia), Vancouver (Canada), Miami (United States) and Accra (Ghana).

Goldcorp president and CEO David Garofalo said the combined company’s assets would be centred in the world’s most favourable and prospective mining jurisdiction and gold districts.

“The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction’s value proposition for all of our stakeholders,” Garofalo said.

“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.”

Following the proposed merger, Gary Goldberg will be appointed CEO of Newmont Goldcorp, with Tom Palmer as president and chief operating officer.

The deal, which has been backed by directors of both companies, is expected to close in the second quarter of 2019 once all approvals have been secured.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.