Barrick builds on being biggest gold miner

Barrick Gold Corp. has agreed to take over Randgold Resources in an all-share deal worth about $7.9 billion that will solidify its position as the world’s biggest gold producer after years of cutbacks.

Randgold investors will receive 6.128 Barrick shares for each of their shares to own about a third of a new Barrick group with some $12.5 billion in revenue and an expected $23.7-billion market capitalization. The deal brings together two companies focused on efficient operations and returns to shareholders as measured by growth in free cash flow, Barrick executive chair John Thornton said on a conference call on Monday.

“We are both committed to financial prudence, particularly in maintaining a strong balance sheet. Perhaps most important, we are of one mind about the true source of shareholder value in the gold industry: per share returns over the long term.”

The merger, expected to close in the first quarter next year, brings together Toronto-based Barrick’s global portfolio heavily focused on the Americas and Randgold’s African focused operations. Randgold’s assets, which produced 1.32 million ounces of gold last year, will see Barrick retain its status as the world’s largest gold producer. Newmont Mining Corp. was expected to eclipse Barrick with an upwards guidance of 5.4 million ounces to Barrick’s five million ounces, after Barrick narrowly kept its status as the biggest last year. Thornton will keep his spot as executive chair: Randgold chief executive Mark Bristow will become president and CEO.