Gold Miners Don’t Quite Put a Ring on It – by Liam Denning (Bloomberg News – March 11, 2019)

Barrick and Newmont finally strike a deal, but it won’t move the needle much.

It’s amazing what just talking it out can achieve. After a parade of insults, suspect numbers and pitch decks, Barrick Gold Corp. and Newmont Mining Corp. have agreed to a deal.

It isn’t the deal Barrick originally pushed for; namely, a hostile full takeover of its rival. Instead, they will holster their Excel models and form a partnership in the one asset anyone really cares about: their Nevada mining operations.

On balance, it looks as if Barrick got most of what it wanted. It will run the Nevada joint venture and control three of the five board seats governing it. Ownership of 61.5 percent reflects Barrick’s much bigger resource base in the region (as my colleague David Fickling laid out here), with Newmont giving ground on its earlier proposal of a 55/45 split.

Meanwhile, Newmont is free to consummate its existing deal to buy Goldcorp Inc. – one that came with a premium that far outstripped original synergy estimates (since revised up, to no one’s surprise.)

Newmont’s shares duly did worse than Barrick’s on Monday morning. But what should concern both companies is just how little regard the market pays to any of this, be it the slagging match or the kumbayas.

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