Barrick, Newmont Settle Disputes and Combine Mines for 10%-15% IPO
Updated
Updated · Financial Times · Aug 10
Barrick, Newmont Settle Disputes and Combine Mines for 10%-15% IPO
3 articles · Updated · Financial Times · Aug 10
Summary
Barrick and Newmont agreed to fold Barrick’s Fourmile discovery into Nevada Gold Mines, ending their fight and clearing the way for Barrick’s planned listing of 10%-15% of its North American business.
About $2bn will be paid by Newmont to Barrick for Fourmile’s added value; Barrick expects to return most of the $1.95bn cash to shareholders, subject to board approval.
Fourmile could produce up to 750,000 ounces a year, and the Nevada joint venture already contributes about half of Barrick’s gold output and profits, making the US assets central to the IPO case.
The settlement also includes undisclosed governance changes at Nevada Gold Mines after Newmont had accused Barrick earlier this year of mismanaging the venture and diverting resources to Fourmile.
Barrick said the companies spent four months rebuilding ties before the truce; its shares fell 8% on Monday even as second-quarter net earnings rose 50% year on year to $1.2bn.
As major investors demand the chairman's resignation, will Barrick's controversial North American restructuring tear the mining giant apart from within?
Could spinning off the world's largest gold complex secretly dilute shareholder wealth instead of unlocking the massive profits Barrick promised?