America’s Gold Giant Bets on Dividends, Improved Mines to Hold Off Rival – by Alistair MacDonald (Wall Street Journal – January 27, 2020)

Newmont’s push to attract more investors comes after Barrick Gold made inroads with its $6 billion acquisition

Newmont Corp.’s lead over bitter rival Barrick Gold Corp. has shrunk after both made big acquisitions. Now the world’s biggest gold producer is betting high dividends and its new mines will drive future stock growth.

Newmont, America’s largest miner, is trying to improve operations at some of the gold mines that it acquired as part of its $10 billion deal for Goldcorp Inc. The Denver-based company says the problems have been fixed and is betting that sharing more of its profits with shareholders will attract generalists back to a sector they have avoided for years.

Barrick Gold, meanwhile, has seen more immediate returns from its $6 billion purchase of South Africa’s Randgold Resources Ltd., and shares of the Canadian miner have outperformed Newmont over the past year. However, some investors—including its largest one—have raised concerns about the company talking about bulking up its copper holdings.

“The Barrick-Randgold deal has gone well, but Newmont has more upside currently if it can execute its plan of optimizing each of Goldcorp’s mines,” said Chris Mancini, an analyst with Gabelli Gold Fund, which owns both stocks.

The divergent performances and strategies are another step in the decades-old and sometimes bitter rivalry that also has included several unsuccessful attempts to merge. The two companies do operate mines together in Nevada, a massive joint venture that investors consider a success.

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