Tuesday , May 18 2021

Newmont intends to buy Goldcorp in a $ 10 billion contract

Newmont Mining announced on Monday that it will buy its smaller rivals Goldcorp in a $ 10 billion deal to create the world's largest gold maker.

The deal is another major merger in the mining sector since Barrick Gold Corp. agreed to buy Randolph Resources in September last year to reduce costs.

In the past few months, investors have criticized the mining sector for poor capital management in the sector. This, with lower gold reserves and higher extraction costs, encouraged mining companies to try to streamline costs.

"The strategic reason for Goldcorp's integration with Newmont is strongly convincing on several levels," Goldcorp CEO David Garvalo said in a statement.

In 2017, Newmont produced 5.3 million ounces of gold, while Goldcorp produced 2.6 million ounces.

Newmont will offer 0.3280 shares, plus $ 0.02 for each Goldcorp share. Based on Newmont's closing price on Friday, the bid points at $ 11.46 for Goldcorp, with a 18 percent premium over Friday's closing stock market price in New York.

Two companies have announced that combined reserves and combined company resources will be the largest in the gold sector and will have locations in different mining areas in America, Australia and Ghana.


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