Barrick and Newmont combine their operations

Barrick et Newmont regroupent leurs activités

Photo: Nathan Denette, The canadian Press
Under the agreement, Barrick will own 61.5% of capital of the joint venture, while Newmont has 38.5 percent.

Barrick Gold has dropped its hostile bid for Newmont Mining for the benefit of the creation of a joint venture that will combine the mining operations of two corporations in Nevada.

According to the two companies, the combination will become the largest gold producer in the world, based on their production at $ 4.1 million ounces in 2018.

“We view this transaction as beneficial — not only for shareholders but also for our employees, to the holders of participation of local and for Nevada as a whole “, argued the chief executive of Barrick, Mark Bristow, during a conference call with analysts.

“Our joint venture will allow us to break down barriers and to leverage our assets as one and the same mine complex, making the best use of our infrastructure grouped together. “

The chief executive officer of Newmont, Gary Goldberg, who plans to retire later this year, explained that Barrick and Newmont had operated their business as good neighbors in Nevada and recalled that the two companies have collaborated successfully on a smaller joint-venture Turquoise Ridge.

“This agreement also shows the way, both for Newmont and for Barrick, the release of a greater value than we could create alone,” added Mr. Goldberg. Newmont would also be able to move forward with its friendly takeover of vancouver, Goldcorp transaction, which will be fully supported by the joint venture.

Synergies

Under the agreement, Barrick will own 61.5% of capital of the joint venture, while Newmont has 38.5 percent.

The two companies have calculated that the joint venture would allow them to generate synergies totalling approximately US $500 million before taxes annually, on average, over the first five full years of the collection. Over a period of 20 years, they are aimed at total savings of $ 4.7 billion.

Barrick had submitted a bid for Newmont in February, but the company of Denver had countered with a proposal for a joint venture.

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