Barrick Gold’s hostile $US18 billion takeover offer for Newmont Mining has been unanimously rejected by the target’s board on the ground that the proposal in not in the best interest of Newmont’s shareholders.

After a comprehensive review conducted in consultation with its financial and legal advisors, Newmont’s Board unanimously concluded that Barrick’s proposal does not constitute, and would not reasonably be expected to constitute, a Newmont Superior Proposal.

Gary Goldberg, Newmont’s Chief Executive Officer stated that the company’s thorough review of Barrick’s unsolicited proposal and its associated risks has reaffirmed Newmont’s conclusion that the combination of Newmont and Goldcorp “represents the best opportunity to create value for Newmont’s shareholders and deliver industry-leading returns for decades to come”.

“Unlike Barrick, Newmont Goldcorp will be centred in the world’s most favourable mining jurisdictions and gold districts,” continued Mr Goldberg.

“The combination with Goldcorp is significantly more accretive to Newmont’s shareholders on all relevant metrics compared to Barrick’s proposal, even when factoring in Barrick’s own synergy estimates. Realizing value through Barrick’s proposal for Newmont’s shareholders hinges entirely on a new management team that lacks global operating experience and is only two months into its own transformational integration.”

The Newmont Board of Directors’ unanimous determination that the combination with Goldcorp represents a superior value creation opportunity over Barrick’s unsolicited proposal.

To realise the savings from Newmont’s and Barrick’s Nevada-related operations, Newmont submitted a joint venture proposal to Barrick. The terms of the proposal are modelled on similar terms to other successful joint ventures, including ones that Barrick has with Newmont and Goldcorp.

Mr Goldberg continued to say that Newmont has consistently expressed to Barrick that the company was open to a joint venture for its operations in Nevada.

“In that regard, we have submitted a term sheet to Barrick proposing a Nevada joint venture. This proposal would enable both companies’ shareholders to realise the available synergies while avoiding the significant risks and complexities associated with Barrick’s unsolicited proposal.”

Key terms of the joint venture proposal to combine the Nevada-related operations of Newmont Goldcorp and Barrick include:
•    Economic Interests: Barrick to hold an economic interest equal to 55 per cent and Newmont Goldcorp to hold a 45 per cent economic interest. The proposed economic interests are based upon analyst consensus Net Present Values for each company’s Nevada-related assets and an equal split of Barrick’s estimated Nevada synergies.
•    Governance: Newmont Goldcorp and Barrick will have an equal number of representatives on the Management and Technical Committees. Decisions by the Management Committee shall be determined by majority vote, with the voting power of the parties’ representatives based on their respective economic interests, subject to a list of customary material matters requiring joint approval. The proposed joint venture’s Operational Management will be jointly appointed by both parties and will be responsible for day-to-day operations.

“We are confident that Newmont’s demonstrated technical expertise and consistent execution will be critical in realizing the synergy opportunities of the proposed joint venture,” said Tom Palmer, Newmont’s President and Chief Operating Officer.

Newmont’s proposed combination with Goldcorp is expected to close in the second quarter of 2019.


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