{"id":1102701,"date":"2019-02-28T13:54:08","date_gmt":"2019-02-28T13:54:08","guid":{"rendered":"http:\/\/www.mining.com\/?p=974241"},"modified":"2019-02-28T13:54:08","modified_gmt":"2019-02-28T13:54:08","slug":"barrick-newmont-step-up-game-to-sway-top-investors","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1102701","title":{"rendered":"Barrick, Newmont step up game to sway top investors"},"content":{"rendered":"

Canada\u2019s Barrick Gold (TSX:ABX)(NYSE:GOLD) and U.S. rival Newmont Mining (NYSE:NEM)\u00a0are working hard on persuading their respective top investors that are merger of the companies is the best, or the worst, option for them.<\/p>\n

The Toronto-based miner, which launched its hostile bid for Newmont<\/a> on Monday, updated its presentation on Thursday<\/a>, adding more information on the expected synergies and benefits of the deal<\/a>.<\/p>\n

Barrick chief executive Mark Bristow reiterated that acquiring the Colorado-based company would create up to $7 billion in synergies, with $4.7 billion coming from Nevada, where both companies have massive mines and exploration projects.<\/p>\n

Bristow wants Newmont shareholders including BlackRock Inc., VanEck, and Flossbach von Storch AG to back its no-premium hostile bid for the miner.<\/p>\n

According to Andrew Cosgrove, an analyst with Bloomberg Intelligence<\/em>, the top 20 holders in Barrick, who own 55% of total shares outstanding, also own 91% of Newmont\u2019s shares. So if Bristow\u2019s power of persuasion works on them, Newmont will be forced to scratch its $10 billion agreement to buy Goldcorp<\/a>\u00a0(TSX:G) (NYSE:GG).<\/p>\n

\"\"<\/p>\n

There\u2019s no consensus about analysts about what the best outcome would be. For Michael Dudas from Vertical Research Partners, Barrick\u2019s all share-no premium deal, currently priced at an 8% discount, may require a reset.<\/p>\n

\u201cOur view supports Newmont completing its Goldcorp proposed transaction, while looking to accelerate joint Nevada asset utilization discussions, structure and detailed plans while Barrick focuses on optimizing its newly combined global mining company,\u201d Dudas wrote.<\/p>\n

While the experts acknowledged that the synergy potential in Nevada for the companies could be \u201cquite healthy\u201d, \u00a0he said that the proposed arrangement \u201cwould heighten overall execution risks presented to a new management team in the early stages of integrating Barrick and Randgold\u2019s portfolio.\u201d<\/p>\n

Rejection in the cards?<\/strong><\/h4>\n

Vertical Research anticipates Newmont investors rejecting the hostile approach. \u201cHostile acquisitions have rarely been successful in the gold mining industry \u2013 especially in a smaller, more collegial sector,\u201d Dundas said.<\/p>\n

Analysts at Canaccord agree, adding that the potential benefits, as outlined by Barrick appeared to be too high, particularly in Nevada.<\/p>\n

In its updated slide presentation titled \u201cCapturing the Missing Billions,\u201d however, Barrick argues that synergies \u201care the premium.\u201d<\/p>\n

\u201cNewmont\u2019s CEO admitted he hasn\u2019t reviewed the opportunity since 2014, and only then a high level review for a couple of days,\u201d the presentation says.<\/p>\n

\u201cNevada JV is not the right path forward. [It] would not enable full realization of benefits due to duplicate administration, conflicting priorities and cumbersome governance,\u201d Barrick notes.<\/p>\n

\u201cIt might be hard for Newmont to swallow, but there\u2019s huge synergies,\u201d Robert McEwen, now the chairman and chief owner of McEwen Mining said in an interview<\/a> this week. \u201cBut they\u2019d also become such a mega producer \u2013 the distance between them and everybody else in the industry becomes a big question of, what happens next?\u201d<\/p>\n

A deal between the two world’s largest gold miners\u00a0would create a $42 billion-global mammoth, leaving Australia\u2019s Newcrest Mining (ASX:NCM) as the world\u2019s No.2 producer of the precious metal, with a current value of about $14 billion.<\/p>\n

It would also bring into question Barrick’s ability to integrate another miner, as the company\u00a0has just completed the acquisition of Randgold<\/a>.\u00a0 The Canadian miner, however,\u00a0highlighted it had outperformed Newmont by 20% since the move was announced in September.<\/p>\n

Should Newmont\u2019s shareholders choose to go ahead with the\u00a0planned acquisition of Goldcorp\u00a0instead, the Colorado-based firm\u00a0would become the world’s biggest, with Barrick grabbing the second place and Newcrest the third.<\/p>\n

The post Barrick, Newmont step up game to sway top investors<\/a> appeared first on MINING.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Barrick forecasts over $7 billion in pre-tax savings over 20 years, based on net present value — $4.7 billion of which will come from Nevada.<\/p>\n

The post Barrick, Newmont step up game to sway top investors<\/a> appeared first on MINING.com<\/a>.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[421,514,404,369,1020,662,663,664,440,517,428],"tags":[9,18,25,48,71,83],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1102701"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1102701"}],"version-history":[{"count":3,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1102701\/revisions"}],"predecessor-version":[{"id":1102738,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1102701\/revisions\/1102738"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1102701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1102701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1102701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}