Newmont, Goldcorp deal moves forward

TORON TO • Newmont Mining Corp announced on Friday that its $10 billion deal to purchase Vancouver-based Goldcorp Inc. is moving forward after the latter obtained an interim plan of arrangement, throwing cold water on the idea that Newmont is interested in a merger with Barrick Gold Corp.

Barrick had issued a press release on Friday to confirm a Bloomberg News report that said Barrick was studying the idea of making a nopremium $19 billion bid for Newmont.

THE LAST TIME, THE WHOLE THING BROKE DOWN IN ACRIMONY.

“We do not intend to speculate on Barrick’s interest or motivation,” said Omar Jabara, a spokesperson for Colorado- based Newmont. “We remain confident that the combination of Newmont and Goldcorp represents an unparalleled opportunity to create value for our shareholders and deliver industry-leading returns for decades to come.”

A Barrick spokesperson was not immediately available to comment.

The interim plan of arrangement, obtained Friday from the Ontario Superior Court of Justice, allows Goldcorp to hold its shareholder meeting on April 4 to vote on the deal and is a necessary step toward closing its acquisition by Newmont, according to the company’s press release.

Newmont faces a $ 650 million break fee if it walks away from the deal with Goldcorp.

Newmont and Barrick, the two largest gold mining companies in the world, have broached the idea of a merger in the past but talks always fell apart.

In April 2014, after the last discussions ended without any result, former Barrick chairman Peter Munk gave a pointed critique of Newmont “as not shareholder-friendly” in an interview with the Financial Post.

Pierre Lassonde, currently the chairman of gold streaming company FrancoNevada Corp. and a former president of Newmont, said he did not believe Newmont was interested in a tie- up with Barrick. “The last time, the whole thing broke down in acrimony,” said Lassonde. “Why do you think that now they would do this at this point in time?”

Newmont was up three per cent at US$36.48 at the end of the trading day on the New York Stock Exchange.

Barrick shares fell 2.4 per cent Friday after it confirmed reports that it has “reviewed the opportunity” to merge with rival Newmont.

The Toronto- based gold miner said it has considered an all-share, zero-premium transaction with Coloradobased Newmont.