Frustration Builds for Newmont Investors – by ALISTAIR MACDONALD and JOHN W. MILLER (Wall Street Journal – July 9, 2014)

Shareholders Lose Patience, Urge Gold Miner to Break Itself Up or Revive Deal With Barrick

In the lobby of the local Elko, Nev., office of Newmont Mining Corp. NEM +2.42% , the world’s second-biggest gold miner by production, a series of posters celebrate almost a century of mining, exploration—and fighting takeovers.

But after another attempt to take over the company failed in April, many investors have lost patience. They are urging the miner to either rekindle this year’s aborted deal with No. 1 Barrick Gold ABX.T +0.35% Corp., or break itself up.

All gold miners are facing a lengthy list of problems—lower gold prices, high costs and declining accessible gold grades. Newmont, based in Greenwood Village, Colo., posted a loss of $2.5 billion last year, the biggest in its history, and its share price has fallen by half since 2011, making it one of the worst performers in the S&P 500.

Investors “are frustrated because they wanted something to happen, after being bruised and battered for the past 18 months,” said Dan Denbow, a portfolio manager for the San Antonio-based United Services Automobile Association, a Newmont shareholder.

Newmont “hasn’t communicated the specifics of what they’re doing,” he said. Now, as many Newmont shareholders clamor for action, the question is: what kind of change do they want?

Joe Foster, a fund manager at Van Eck Associates Corp., says he wants to see both Newmont and Barrick split into many pieces. “Both companies are too big for their own good,” he said. “I would like to see them get smaller, not bigger.”

Van Eck was Newmont and Barrick’s largest shareholder as of the end of March.

Newmont solicited input from its shareholders about its future, and is “pursuing every viable opportunity to improve value,” said Omar Jabara, a spokesman. The miner sold $800 million of assets in the last 12 months, “with more sales in the works,” he said.

Newmont reduced costs by nearly $1 billion in 2013 and will save up to $700 million more by 2016, Mr. Jabara said.

A Barrick spokesman said the Toronto-based company has sold more than $1 billion of noncore assets in recent years.

Newmont and Barrick have said they are still open to cooperation in Nevada—which represents around 40% of their production—as a way to reduce costs.

The Newmont-Barrick deal unraveled amid what people familiar with the matter described as clashes over governance issues. Newmont blamed Barrick Chairman John Thornton for making a “unilateral declaration” that the talks were over. Barrick has said talks unraveled after Newmont tried to renegotiate “foundational elements,” such as governance roles.

Newmont, which has traded on the New York Stock Exchange since 1940 and will turn 94 next year, is famously resistant to change. The Elko posters, which Newmont says were created in 2008 as part of a companywide history campaign and trivia contest for employees, detail some of the failed attempts to take it over.

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