Newmont Says Rival Miner Barrick Gold Has Bought a Small Stake Barrick proposes to make it easier for Newmont stock owners to call a meeting, a move that comes ahead of a potential hostile bid
The Merian gold mine, owned and operated by the Newmont Suriname mining company in Suriname in 2016.
The Merian gold mine, owned and operated by the Newmont Suriname mining company in Suriname in 2016. PHOTO: RANU ABHELAKH/REUTERS 2 COMMENTS By Alistair MacDonald Updated Feb. 24, 2019 7:33 p.m. ET Newmont Mining Corp. NEM 3.02% said Sunday that rival miner Barrick Gold Corp. GOLD -2.10% has taken a small stake in the company and proposed to make it easier for Newmont stock owners to call a shareholder meeting, a move that comes ahead of a potential hostile bid by the Canadian company.
A spokesman for Denver-based Newmont said Barrick had bought 1,000 shares in the company, which has 535 million shares outstanding.
Barrick, with a market value of almost $23 billion, said Friday it is considering an all-stock, no-premium transaction to merge with Newmont, which is valued at about $19 billion.
Buying a small stake allowed Barrick to make two shareholder proposals for consideration at Newmont’s next annual shareholders meeting.
One proposal would be to amend Newmont’s bylaws to lower the share-ownership threshold necessary to requisition shareholder meetings to 15% from the current 25%, Newmont said.
Barrick also proposed to repeal all bylaw amendments implemented since Oct. 24, 2018. Newmont said there have been no bylaw amendments since then.
Though uncommon, Barrick’s move has the potential to turn into a possible proxy fight for control of Newmont’s board to force a deal. By seeking to make it easier for shareholders to force Newmont to call a shareholder vote, Barrick is laying the groundwork to put forth a slate of directors who might be more amenable to a merger if Barrick pursues a tie-up and Newmont’s current management and board oppose the idea.
A spokesman for Barrick declined to comment.
Newmont agreed earlier this year to buy miner Goldcorp Inc. of Vancouver, Canada, in a stock deal valued at $10 billion.
The pending deal would make Newmont the biggest gold miner by production, passing longtime rival Barrick, whose output has been declining.
The Newmont spokesman said the Goldcorp tie-up “will create an unmatched portfolio of world-class operations, projects, reserves, exploration opportunities and talent.”
He said the company won’t speculate on Barrick’s motivation for announcing it is considering making a hostile bid. Newmont said it hasn’t yet received an approach from Barrick.
Goldcorp shareholders are set to vote on Newmont’s offer April 4.
Barrick has long considered merging with Newmont to pair up their large gold-mining operations in Nevada and create an industry giant that would dwarf its nearest competitor. The last serious attempt at a deal faltered in 2014.
—Ben Dummett contributed to this article.
Write to Alistair MacDonald at alistair.macdonald@wsj.com
Appeared in the February 25, 2019, print edition as 'Newmont Rival Buys Stake.'
Parliament leaders want Romanian gold reserves brought home
Submitted by cpowell on 11:50PM ET Thursday, February 28, 2019. Section: Daily Dispatches By Ioana Erdei Business Review, Bucharest, Romania Wednesday, February 27, 2019
BUCHAREST, Romania -- Chamber of Deputies President Liviu Dragnea and Socia Democratic Party Sen. Serban Nicolae have proposed a bill to force the National Bank to store 95 percent of Romania's gold reserves in the country.
The bill is meant to change the law that establishes the National's Bank statute. According to the document, the reason for this demand is that gold stored abroad produces only additional costs with storage. The bill also wants to eliminate the word "international" from the terminology used by the National Bank in "international gold reserves."
Romania's gold reserves, 103.7 tons, are stored in three countries, according to the National Bank officials. Three years ago, the institution announced that 60 percent of the gold reserves were stored abroad. The situation has not changed -- 61 tons of the gold are stored at the Bank of England, more than 40 tons are kept at the Bank of Romania in Bucharest, and fewer than five tons are stored at the Bank for International Settlements in Basel, Switzerland. ... ... For the remainder of the report:
Newmont’s Goldcorp Deal Faces Opposition. Here’s What It Means for Gold Miners. By Al Root March 22, 2019 1:08 p.m. ET
Newmont’s Goldcorp Deal Faces Opposition. Here’s What It Means for Gold Miners.
Photograph by Romeo Gacad/AFP/Getty Images Text size
Hedge fund and prominent gold investor Paulson & Co. is opposing Newmont Mining ’s proposed merger with Goldcorp .
“The $1.5 billion premium to Goldcorp (ticker: GG) shareholders is unjustified given Goldcorp’s poor performance,” wrote John Paulson and Marcelo Kim in a letter sent to Newmont (NEM) CEO Gary Goldberg.
The suggestion that Goldcorp has struggled isn’t controversial. Its shares have returned negative 15% a year on average for the past five years. While combining a top operator with an underperforming asset can generate shareholder value, which may be true for Newmont-Goldcorp, the deal has implications for other gold miners as well.
The back story: Goldcorp stock has struggled—and more than other gold miners. The VanEck Vectors Gold Miners ETF (GDX) has returned negative 1.7% a year on average over the last five years. Still an annual loss, but better than Goldcorp stock’s performance. Newmont shares, by contrast, have fared much better returning 7.7% a year on average over the same span.
The wide spread in stock performance may be driving M&A activity. 2019 started off with a bang in the sector when Newmont announced its $13 billion bid for Goldcorp. About a month later Barrick Gold (GOLD) announced a hostile bid for Newmont saying a combination between Barrick and Newmont was superior to the company Newmont wants to form with Goldcorp.
Newmont and Barrick eventually agreed to a joint venture—combining assets in Nevada to capture synergies that benefit both companies. The end of Barrick’s hostile bid left the Goldcorp deal active.
What’s new: Paulson & Co wants the terms of the Newmont-Goldcorp deal re-cut and wants Newmont to offer 0.254 shares of Newmont stock for each share of Goldcorp (plus 2 cents of cash per Goldcorp share). The new ratio values Goldcorp at $8.73 per share, below the $9.69 Goldcorp was trading at before the Newmont deal was announced.
Goldcorp shares were at $10.64 in Friday afternoon trading—more than 20% above Paulson’s suggested price. Based on that reaction, the market doesn’t think a large adjustment to the exchange ratio is likely yet.
Paulson & Co. referred Barron’s to its letter when asked about the deal, and Newmont didn’t immediately respond to questions about the price it’s paying for Goldcorp.
Looking ahead: It seems that most everyone involved agrees with the premise of the Newmont-Goldcorp transaction—that Goldcorp could benefit from Newmont’s operational acumen. Barron’slikes the Newmont-Goldcorp deal as well, in part, for the same reason. Paulson’s suggested exchange ratio may be its opening gambit with Newmont in an effort to recapture some of the deal value, but it would be surprising to see the entire deal derailed.
And Newmont’s approach could have implications for other gold miners. Companies like Kinross Gold (KGC) and Eldorado Gold (EGO) have lower returns than peers of similar size. Perhaps larger miners with better operational histories could adopt the Newmont approach in an attempt to create value through better operational execution.
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