Archive | Goldcorp Inc.

Mystery solved: Why Newmont is offering a mere 2 cents in cash as part of its bid for Goldcorp – by David Milstead (Globe and Mail – January 17 2019)

https://www.theglobeandmail.com/

It is the mystery of the two cents. When Newmont Mining Corp. said on Monday it will buy Goldcorp Inc. for about $10-billion, swapping its stock for Goldcorp’s, it said it would add 2 US cents per share in cash to the transaction. The tiny little sweetener will cost Newmont just US$17-million.

Why even bother? Robert Willens, a long-time U.S. securities analyst who specializes in matters of taxation, seems to have the answer. Newmont is creating a sizable but little-understood tax benefit for Goldcorp Inc.’s U.S. shareholders that effectively makes its offer more valuable than it appears.

The companies have not addressed the matter. Newmont declined to comment for this story and Goldcorp did not respond to a request. But Mr. Willens told his clients on Tuesday that the structure of the deal makes it taxable for Goldcorp’s U.S. and Canadian shareholders. Usually, companies do everything to avoid that. Continue Reading →

Eyes on Newcrest as gold dealmaking heats up – by Nichola Saminather (Reuters U.S. – January 14, 2019)

https://www.reuters.com/

TORONTO (Reuters) – Two recent large M&A deals in the gold sector have prompted speculation that Newcrest Mining (NCM.AX), Kinross Gold Corp (K.TO) and B2Gold Corp (BTO.TO) may be among the next gold companies to combine with a rival, bankers and analysts said.

On Monday, Newmont Mining (NEM.N) announced a $10 billion takeover of Goldcorp Inc (G.TO), close on the heels of Barrick Gold’s (ABX.TO) purchase of Randgold Resources.

Deal-making had largely been dormant in the gold sector in recent years, as companies focused on cutting costs amid investor criticism of inadequate management of capital. But the need to bolster shrinking gold reserves to boost growth and take advantage of rising gold prices are now providing the impetus for consolidation. Continue Reading →

Newmont CEO defends Goldcorp deal amid speculation rival bidders could emerge – Gabriel Friedman (Financial Post – January 16, 2019)

https://business.financialpost.com/

One analyst downgraded Newmont from outperformer to neutral ‘until the company provides additional clarity on its strategic plans’

Gary Goldberg, chief executive of Colorado-based Newmont Mining Corp., started off Tuesday morning feeling upbeat.

One day after announcing his company’s US$10 billion bid for Vancouver-based Goldcorp Inc., his company’s stock was trading down, again, falling three per cent at one stage on Tuesday, after falling 8.89 per cent on Monday; and now Goldcorp was also trading down more than three per cent.

Reaction to the deal looked decidedly mixed. One analyst was raising questions about the rationale for the deal and another was suggesting the price was too low and Goldcorp could attract other bidders; and yet Goldberg insisted none of it was surprising or unnerving in the slightest. Continue Reading →

Newmont likely to sell a number of Goldcorp’s Canadian mines – by Niall McGee (Globe and Mail – January 16, 2019)

https://www.theglobeandmail.com/

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. Continue Reading →

Monster Gold-Mining Deals Pile Pressure on Those Left Behind – by Thomas Biesheuvel and Danielle Bochove (Bloomberg News – January 15, 2019)

https://www.bloomberg.com/

Mark Bristow’s tenure as boss of the world’s biggest gold miner might have been short-lived, but his message for smaller rivals just got even more pointed.

“Holy camoly, I missed out on a great opportunity!” is how Bristow described anyone not involved in Barrick Gold Corp.’s purchase of Randgold Resources Ltd. in September. With Newmont Mining Corp. poised to become the No. 1 producer through a $10 billion takeover of Goldcorp Inc. announced Monday, the pressure on those left behind will be even greater.

The two mega deals promise to transform the industry that many investors have shunned due to floundering bullion prices and poor decision making by producers. The newly combined companies are also expected to put several unloved assets up for sale, leaving lots of room for maneuvering by those that missed out on the dealmaking so far. Continue Reading →

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 →

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 →

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 →

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 →

Miners aim to rebuild global reputation – by Nelson Bennett (Business in Vancouver – December 12, 2018)

https://biv.com/

Canadian companies working to improve industry’s image

Over the years, Canadian mining companies operating overseas in developing countries have earned a bad reputation for their treatment of the environment, workers and local indigenous people.

There have been recent high-profile cases of Canadian mining companies being sued in Canadian courts for alleged violence against protests in Guatemala and alleged use of slave labour in Eritrea. Less frequently in the headlines are the positive things some Canadian miners are doing in the countries where they operate.

B2Gold Corp. (TSX:BTO), for example, has won a number of awards for its corporate responsibility efforts in Nicaragua, the Philippines, and Namibia, and NexGen Energy Ltd. (TSX:NXE), a Vancouver uranium mine developer, recently won an award from the Prospectors & Developers Association of Canada for social development programs it has initiated in La Loche, Saskatchewan. Continue Reading →

Indigenous Partnerships in Powerful Alignment at Goldcorp’s Musselwhite (Goldcorp.com Blog – November 27, 2018)

Between 2012 and 2015, Goldcorp’s Musselwhite mine partnered with surrounding First Nations communities and provided early funding to create a joint-venture called Wataynikaneyap (Watay) Power, to bring electrical grid connection into the northwest region of Ontario, Canada, and potentially provide power to Musselwhite.

Musselwhite, a fly-in, fly-out operation located approximately 500 kilometres north of Thunder Bay, operates in a region where 25 remote First Nations communities rely on high-cost diesel generation as their sole source of electricity, burning approximately 25 million litres of diesel fuel a year to get electricity into their homes and businesses – enough diesel to fill 10 Olympic-sized swimming pools.

With additional fuel delivery challenges and environmental disadvantages, this has limited the growth of the communities and their access to economic opportunities. Similarly, Musselwhite has also been significantly constrained by limited transmission grid capacity in the area, resulting in a heavy reliance on diesel generation. Continue Reading →