Recent M&A activity in the mining sector like Newmont Mining Corp.’s move this week to buy Goldcorp Inc. to form the world’s largest gold miner, and rival Barrick Gold Corp.’s acquisition of Randgold Resources Ltd., have shaken up the lacklustre industry.
As part of the deals, the mining giants have said they will be selling assets — sparking speculation on which mines could be up for grabs, and who would be interested in buying them.
Newmont and Goldcorp. said on Monday the merged company will sell up to US$1.5 billion in assets over the next two years, while Barrick has pledged to focus on cash-generating assets.
Assuming the Newmont-Goldcorp. deal closes pending shareholder and regulatory approvals, Michael Siperco, analyst at Macquarie Capital Markets, told BNN Bloomberg the new company’s total divestment plan could be accounted for solely by Goldcorp. selling its 40 per cent stake in the Pueblo Viejo joint venture to partner Barrick. Barrick already owns 60 per cent of the Dominican Republic mine.
Pierre Lassonde, chairman of Franco-Nevada Corp., added in an email to BNN Bloomberg that Goldcorp. has large capital expenditure “looming” with the Pueblo Viejo mine, which the miner may want to spend on other assets.
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