Newmont Mining to create world’s biggest gold producer by output with $10bn deal to buy Goldcorp

Newmont Mining Corp (NYSE:NEM) is to buy Canadian rival Goldcorp Inc (TSX:G) in a deal valued at $10bn which will create the world’s biggest gold producer by output.

In 2017, Newmont produced 5.3mln ounces of gold, while Goldcorp mined 2.6mln ounces, and the combined company is expected to produce 6-7mln ounces of gold over the next ten years.

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In a statement, Newmont said it will offer 0.3280 of its shares and $0.02 for each Goldcorp share, equivalent to $11.46 per share, a premium of about 18% based on Friday’s closing prices.

It pointed out that the combined company’s reserves and resources will represent the largest in the gold sector, located across the Americas, in Australia and in Ghana.

The Canadian company’s chief executive officer David Garofalo said: “The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels.”

In pre-market New York trading, Goldcorp’s shares were trading at $12.86 each, while Newmont Mining’s shares were down 6.5% at $32.60.

The deal is the second mega-merger in the gold mining in the last year, with Canada’s Barrick Gold Corp (TSX:ABX) having bought London-listed Randgold Resources in a deal agreed in September 2018.

Story by ProactiveInvestors