U.S.-based Newmont strikes $10-billion deal to take over Goldcorp Inc.
Newmont Mining Corp. has struck a US$10-billion deal to take over Goldcorp Inc. in a move that will see the U.S.-based mining giant grow even larger while Canada’s mining industry loses a head office.
Colorado-based Newmont will add Vancouver-based Goldcorp’s seven mines in North and South America to its global operations of 12 operating mines to create a company expected to rival or top Barrick Gold as the world’s largest gold producer.
“This is not a deal we have to do, this is a deal that we want to do,” Newmont CEO Gary Goldberg told a conference call Monday.
The deal follows Barrick Gold’s US$6.1-billion all-stock takeover of Randgold Resources Ltd. that closed at the start of the year to create a company with a combined 2018 gold production guidance of between 5.8 million and 6.3 million ounces.
Newmont Goldcorp, as the new company will be called, said it will target annual production between six and seven million ounces after selling off more than a billion dollars worth of assets in the next two years. Goldcorp said Monday it produced 2.3 million ounces last year, while Newmont has forecasted between 4.9 million and 5.2 million ounces for 2018.
The combined company, to be owned 65 per cent by current Newmont shareholders and 35 per cent by Goldcorp shareholders, will continue to have a significant presence in Vancouver as the designated base of operations for North America.
“The formation of Newmont Goldcorp ensures that Canada will continue to be a pillar of an industry-leading gold company,” Goldcorp CEO David Garofalo said.
He noted the Vancouver office will manage more ounces of gold production and oversee a workforce of more than 10,000, as well as Indigenous community relations and renewed exploration.
“Newmont Goldcorp will also provide prospects for new investment in a reinvigorated exploration program in Canada...with the largest pipeline of feasibility and development-stage assets in the Canadian gold business,” said Garofalo.
The emphasis on a sustained Canadian presence comes after Barrick Gold has been criticized for a hollowing-out of its Canadian footprint following the deal with London-listed Randgold.