Newmont Mining Corp.’s acquisition of Goldcorp Inc. will likely result in the sale of a number of the latter’s Canadian mines as the combined company focuses on its best-performing and lowest-cost operations.
On Monday, the Denver-based gold major announced it had reached a friendly deal to acquire Vancouver-based Goldcorp for US$10-billion in a mostly share transaction that will see Newmont’s mine portfolio jump to 20 properties across four continents.
It was the second major deal in the Canadian gold sector in the past few months, with Toronto’s Barrick Gold Corp. recently closing its US$6-billion acquisition of Randgold Resources Ltd.
Newmont chief executive Gary Goldberg said in a conference call on Monday with analysts that the company plans to sell as much as US$1.5-billion in assets over the next two years as it studies its portfolio “on a value and risk basis.” Mr. Goldberg did not specify which mines would be going on the block, but he indicated that potential buyers were already interested, saying he had “a lot of inbound calls from different folks.”
In a note to clients, RBC Dominion Securities Inc. analyst Stephen Walker said Newmont’s asset sales could be a mix of the combined company’s higher-cost properties or those with lower reserves, including Goldcorp’s Red Lake, Musselwhite and Porcupine mines, all of which are in Ontario.
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