Archive | Gold and Silver

Newmont’s Goldcorp Gamble May Need ‘Drastic Surgery’ to Pay Off – by Danielle Bochove, Caleb Mutua and Marvin G. Perez (Bloomberg News/Yahoo – January 15, 2019)

https://finance.yahoo.com/

(Bloomberg) — The cost to create the world’s largest gold company: A 17 percent premium for a $10 billion all-shares acquisition that faces some big-time challenges down the line.

Newmont Mining Corp.’s deal for Goldcorp Inc. stands in stark contrast to the recent zero-premium merger between Barrick Gold Corp. and Randgold Resources. The key question: Why? In October, Goldcorp shares fell to their lowest since 2002 after the miner reported lower output and higher costs than expected. Since then the stock improved only marginally before today.

The merged company will have the world’s largest production and reserve base, and the kind of liquidity and diversified assets required to attract institutional investors, Stephen D. Walker, an analyst with RBC Capital markets, wrote in a research note. Continue Reading →

Newmont Mining to take over Goldcorp in US$10-billion acquisition deal – by Niall McGee and Rachelle Younglai (Globe and Mail – January 15, 2019)

https://www.theglobeandmail.com/

Goldcorp Inc. has agreed to a US$10-billion takeover by Newmont Mining Corp. that sees the Vancouver company, once the world’s most valuable gold miner, acquired by a U.S. competitor at a fraction of its peak value.

The Goldcorp takeover is the second big deal in the past few months involving a large Canadian gold company. On Jan. 1, Toronto-based Barrick Gold Corp. closed its US$6-billion acquisition of African operator Randgold Resources Ltd.

Now, Newmont is set to surpass Barrick and grab the crown as the world’s largest gold producer by market capitalization, production and reserves. Newmont and Goldcorp will produce 6 to 7 million ounces of gold a year over the next decade, executives said on Monday. The combined stock market capitalization of the new company would be about $35-billion, compared with Barrick’s $29-billion. Continue Reading →

OPINION: After Goldcorp-Newmont deal, who’s next in the gold-industry merger wave? – by Andrew Willis (Globe and Mail – January 15, 2019)

https://www.theglobeandmail.com/

In the gold sector, nothing gets the sharks circling like the combination of promising mines and a depressed stock price. The sector’s prolonged slump now has its biggest predators, Newmont Mining Corp. and Barrick Gold Corp., feeding on weaker rivals, creating expectation of further takeovers in an industry where many experts see consolidation as long overdue.

Denver-based Newmont snapped up former market darling Goldcorp Inc. for US$10-billion after a series of management miscues left the Vancouver-based owner of 13 properties with a valuation that trailed comparable companies.

Barrick took advantage of much the same dynamics last September, striking a US$6-billion deal with Randgold Resources Ltd. after investors got the jitters over the company’s mines in politically unstable African countries such as Mali and the Democratic Republic of Congo. Continue Reading →

Why the Newmont-Goldcorp blockbuster deal is in sharp contrast to the Barrick-Randgold merger – by Gabriel Friedman (Financial Post – January 15, 2019)

https://business.financialpost.com/

Newmont has higher a dividend, safer locations than Barrick and will invest in Canada, but its stock still fell. Perhaps copper-gold mining will help it shine

As Newmont Mining Inc.’s chief executive Gary Goldberg hawked a proposed $10 billion all-stock purchase of Vancouver-based Goldcorp to his investors on Monday, he and his team emphasized massive gold production, a focus on mines in the safest jurisdictions in the world and continued investment in Canada.

That drew a stark contrast to chief rival Barrick Gold, which also recently completed a mega-merger, and has reduced its presence in Canada and grown in more risky jurisdictions. “This is not a deal we have to do, it’s a deal we want to do,” Goldberg told investors.

But while Barrick’s share price surged after announcing its deal, Newmont’s stock had declined 8.89 per cent to close at US$31.78 on Monday afternoon. Continue Reading →

Newmont Mining to buy Goldcorp – by Ian Bickis (Canadian Press/Timmins Daily Press – January 15, 2019)

https://www.timminspress.com/

Newmont Mining Corp. has struck a US$10-billion deal to take over Goldcorp Inc. in a move that will see the U.S.-based mining giant grow even larger while Canada’s mining industry loses a head office.

TORONTO — Newmont Mining Corp. has struck a US$10-billion deal to take over Goldcorp Inc. in a move that will see the U.S.-based mining giant grow even larger while Canada’s mining industry loses a head office.

Colorado-based Newmont will add Vancouver-based Goldcorp’s seven mines in North and South America to its global operations of 12 operating mines to create a company expected to rival or top Barrick Gold as the world’s largest gold producer. “This is not a deal we have to do, this is a deal that we want to do,” Newmont CEO Gary Goldberg told a conference call Monday.

The deal follows Barrick Gold’s US$6.1-billion all-stock takeover of Randgold Resources Ltd. that closed at the start of the year to create a company with a combined 2018 gold production guidance of between 5.8 million and 6.3 million ounces. Continue Reading →

Newmont Deal for Goldcorp Further Erodes Canada’s Gold Clout – by Danielle Bochove and Jacqueline Thorpe (Bloomberg News – January 14, 2019)

 

https://www.bloomberg.com/

Canada’s influence on the global mining industry appears to be shrinking by the day. Perhaps stung by the nationalistic backlash against Barrick Gold Corp.’s merger with Randgold Resources Ltd., Newmont Mining Corp. devoted a big chunk of its news release Monday explaining how its $10 billion offer for Vancouver-based Goldcorp Inc. will help Canada.

But there’s no hiding the fact that the global head office of the world’s largest gold miner will be in Greenwood Village, Colorado, where Newmont is based. Like “New Barrick,” which no longer has its top executives in Canada, Newmont Goldcorp’s incoming chief executive officer and current chairwoman are expected to remain in the U.S.

While some jobs will flow from Nevada to the miner’s new regional base for North America in Vancouver, it’s hard to imagine the influence of that city not waning as a result of the deal. Continue Reading →

COLUMN-Three reasons gold may be about to run with the bulls – by Clyde Russell (Reuters U.S. – January 14, 2019)

https://www.reuters.com/

LAUNCESTON, Australia, Jan 14 (Reuters) – The three legs that supported gold’s extended rally from just after the 2008 global recession until the all-time peak in 2011 may be making something of a comeback this year.

This is sparking hopes that the precious metal may finally break out of a fairly narrow five-year range, although it’s still far from certain that the dynamics for a sustained rally are entrenched.

The 2008-11 rally that saw spot gold almost triple in value to reach a record of $1,920.30 an ounce was built on three pillars, namely strong physical demand from top buyers China and India, robust central bank purchases, and appetite for a safe haven investment amid the fallout from the global recession. Continue Reading →

OPINION: Another one bites the dust: Goldcorp sale a further example of the hollowing-out of corporate Canada – by Eric Reguly (Globe and Mail – January 14, 2019)

https://www.theglobeandmail.com/

Toronto’s Barrick Gold always wanted to team up with Newmont Mining of Colorado. Merging the two giants, which have adjoining operations in gold-rich Nevada, would have created an unassailable industry leader and reduced costs by an estimated US$1-billion a year. On paper, it looked like a dream deal. But it never got off the ground, in good part because Barrick founder Peter Munk wanted the new company to stay in Toronto, not move to Denver.

Were he alive today, Mr. Munk – a Canadian patriot who believed in the value of head offices – would be distraught. In the autumn, Barrick bought Randgold Resources but handed management control to Randgold’s executives, who promptly gutted Barrick’s Toronto headquarters, leaving the world’s top producer with a mere 65 employees in its echo-chamber offices on Bay Street. The deal was, in effect, a reverse takeover. The new Barrick will be run from the Channel Islands.

On Monday, it was Newmont’s turn to accelerate what appears to be the second wave of the great hollowing-out story, a decade after Inco, Falconbridge, Alcan, Dofasco, Stelco and dozens of other industrial powerhouses were eradicated from the Canadian map. Continue Reading →

Barrick CEO to Forge Ahead in Latin America Despite Past Strains – by Danielle Bochove and Laura Millan Lombrana (Bloomberg News – January 10, 2019)

https://www.bloomberg.com/

Barrick Gold Corp.’s new boss intends to push ahead with plans to increase investment in the mineral-rich — but environmentally tricky — deposits straddling the Chile-Argentina border.

“If you want to find elephants, go to elephant country,” Chief Executive Officer Mark Bristow, a South African geologist and big-game hunter, said in a phone interview. The Toronto-based company “absolutely” intends to invest more money in the El Indio copper-and gold belt, he said, adding that its partnerships with Chinese and Chilean miners remain key to its strategy in the region.

The world’s largest gold miner, which completed its merger with Randgold Resources Ltd. at the beginning of the year, had been revamping its South American strategy since John Thornton became chairman in 2014. Continue Reading →

OPINION: What happens when Canadian companies stop flying the flag – by Matthew Bellamy (Globe and Mail – January 12, 2019)

https://www.theglobeandmail.com/

Matthew J. Bellamy is an associate professor of history at Carleton University in Ottawa and the author of Profiting the Crown: Canada’s Polymer Corporation.

When General Motors announced in late November that it would be closing its plant in Oshawa, Ont., the outrage was immediate – and perfectly understandable. Here was a strategic move on the part of a multinational company, tearing out roots and slashing the manufacturing jobs that were the lifeblood of the town. Add in the billions of dollars that Ottawa had spent to keep the company in Canada, and it’s easy to see why Canadians would take this so personally.

Meanwhile, the recent news about Barrick Gold – that it would lay off more than half of the staff at its Toronto head office in the wake of a merger with Randgold, an African operator headquartered in the Channel Islands, and revamp its board of directors to leave just one Canadian-born member who lives in New York – hasn’t stirred the emotions in quite the same way.

Fair enough, too: Much of Barrick’s business, since it transitioned from a money-losing oil and gas firm to a money-spinning mining company, has happened outside of Canada, in places such as the United States, Australia, the Dominican Republic, Peru, Argentina and Chile. And even though the company’s dynamic founder, Peter Munk, lived in Canada for seven decades, he passed away in March. Continue Reading →

Newmont to buy Goldcorp in US$10B mega mining deal – by Thomas Biesheuvel and Elena Mazneva (BNN/Bloomberg News – January 14, 2019)

https://www.bnnbloomberg.ca/

Newmont Mining Corp. will buy rival Goldcorp Inc. in a deal valued at US$10 billion, creating the world’s largest gold miner and cementing a return of M&A to the industry.

The transaction comes just three months after Barrick Gold Corp.’s move to buy Randgold Resources Ltd. in a US$5.4 billion transaction, which instantly spurred speculation that rivals would have to respond.

Goldcorp shares surged in U.S. pre-market trading, climbing 13 per cent to US$10.96 as of 6:25 a.m. in New York. Newmont shares slipped 3 per cent.

For the rest of this article: https://www.bnnbloomberg.ca/newmont-to-buy-goldcorp-in-us-10b-mega-mining-deal-1.1197745

Canada’s Goldcorp to be swallowed by Newmont in $10-billion all-stock deal – by Niall McGee (Globe and Mail – January 14, 2019)

https://www.theglobeandmail.com/

Canada’s Goldcorp Inc. is being swallowed by United States gold major Newmont Mining Corporation in a friendly all-stock acquisition valued at $10-billion. This is the second huge M&A deal in the global gold sector in the past few months. Barrick Gold Corp. closed its US$6-billion acquisition of Randgold Resources Ltd only a few weeks ago.

The Globe and Mail reported on Friday that Goldcorp was in talks with Newmont as it explored strategic options with its stock trading at a 17-year low. Goldcorp also talked to Australian gold major Newcrest Mining before Christmas about a deal but those talks fell apart.

Goldcorp shareholders will receive 0.328 of a Newmont share for their stock. The 17-per-cent premium being paid is low compared to similar sized acquisitions on a historical basis. When the gold price was trading at much higher levels, takeover premiums in the 30 to 40 per cent range were common in the industry. Continue Reading →

Goldcorp’s stumble: How an industry leader blew it – by Niall McGee (Globe and Mail – January 12, 2019)

https://www.theglobeandmail.com/

Peter Jacobs liked what he heard when he attended Goldcorp Inc.’s investment day in January of last year. So the chief investment strategist with Stifel RMG Group, a Washington-based financial firm, started buying shares.

Goldcorp management’s presentation made a strong case that the mining company “was on track to increase production and reserves, lower costs, deleverage the balance sheet and create additional shareholder value,” he said.

A year later, the picture isn’t so pretty. In late October, Goldcorp lost close to a fifth of its market value in a single day after reporting falling production, rising costs and a decline in reserves. Gold grades at its flagship Cerro Negro mine in Argentina fell by more than 30 per cent in the third quarter compared with the previous quarter. Continue Reading →

Brian K. G. Meikle (1932 – 2016) – 2019 Canadian Mining Hall of Fame Inductee

The Canadian Mining Hall of Fame was conceived by the late Maurice R. Brown, former editor and publisher of The Northern Miner, as a way to recognize and honour the legendary mine finders and builders of a great Canadian industry. The Hall was established in 1988. For more information about the extraordinary individuals who have been inducted into the Hall of Fame, please go to their home website: http://mininghalloffame.ca/

The greatest discoveries are transformative, and Brian Meikle is one of only a few modern-era geologists who achieved this pinnacle of success. In the 1960s, he contributed to the discovery and development of the Camflo gold mine in Quebec, and later was part of a talented team that made it a cornerstone of growth for Barrick Gold (formerly American Barrick). In the early 1980s, he recognized the potential of the Mercur gold mine in Utah, which became a key link in the evolution of Barrick.

Meikle’s crowning achievement was the 1986 Goldstrike discovery in Nevada, which grew to approximately 60 million ounces of gold reserves and resources in several deposits. Goldstrike propelled Barrick into the world’s largest gold miner and generated immense wealth that has flowed back to benefit Canadian companies, shareholders and society.

Born in Montreal, Meikle returned to Canada from California as a post-graduate student. He earned an MSc degree (geology) from McGill University in 1955, followed by his PhD in 1959. He was the recipient of McGill’s Logan Gold Medal in 1958, awarded to the graduating student who stands highest in the First Class Honours list in Geology.

http://www.pendaproductions.com/ This video was produced by PENDA Productions, a full service production company specializing in Corporate Communications with a focus on Corporate Responsibility.

In 1962, Meikle joined Camflo Mines and was instrumental in discoveries that made the mine and the company. He spent 22 years with Camfl o in diverse roles, including mine manager and vicepresident of operations. In 1984, Peter Munk acquired Camflo for American Barrick and also gained a dream technical team to help realize his dream of creating a major gold producer. Continue Reading →

A. M. (Sandy) Laird (Born 1934) – 2019 Canadian Mining Hall of Fame Inductee

The Canadian Mining Hall of Fame was conceived by the late Maurice R. Brown, former editor and publisher of The Northern Miner, as a way to recognize and honour the legendary mine finders and builders of a great Canadian industry. The Hall was established in 1988. For more information about the extraordinary individuals who have been inducted into the Hall of Fame, please go to their home website: http://mininghalloffame.ca/

During a 39-year career with Placer Dome and predecessor Placer Development, Sandy Laird was directly involved in transforming at least 15 mineral projects into profitable mines. He was a driving force in the company’s project development group, which he headed from 1988 to 1995, and was later responsible for Placer Dome’s global operating and development subsidiaries.

Many of the mines were large, technically complex, and in challenging jurisdictions. Laird earned a reputation for overcoming obstacles and delivering projects to high technical, social and environmental standards. He was a team-builder and a key participant in the growth of Placer into one of the world’s great mining companies before it was acquired by Barrick Gold in 2006.

Born in Invermere, BC, Laird spent several summers as an underground miner and a geologist’s assistant before graduating from the University of British Columbia with a BASc in mining engineering in 1957. He joined Placer in 1960, and worked in various positions at the Craigmont mine near Merritt, BC. Placer was then considered a prime training ground for young engineers, and Laird’s responsibilities increased as he quickly scaled the ranks, moving to Endako as Open Pit Superintendent in 1964.

http://www.pendaproductions.com/ This video was produced by PENDA Productions, a full service production company specializing in Corporate Communications with a focus on Corporate Responsibility.

From 1968 to 1971, he was the Resident Manager during construction and start-up of the Marcopper mine in the Philippines. During the next ten years, Laird worked in management positions in Vancouver and San Francisco, and built and managed the McDermitt mine in Nevada. Continue Reading →