Goldcorp Announces Support for Barrick and Newmont Nevada Joint Venture T.G | Canada NewsWire VANCOUVER, March 11, 2019 /CNW/ -
GOLDCORP INC. (TSX: G, NYSE: GG) ("Goldcorp" or the "Company") announced today that it has consented to and fully supports the announced Nevada Joint Venture between Barrick Gold Corporation ("Barrick") (NYSE:GOLD) (TSX:ABX) and Newmont Mining Corporation ("Newmont") (NYSE: NEM). More information on the Nevada Joint Venture is available at http://www.newmont.com
Goldcorp's board of directors continues to recommend that Goldcorp shareholders vote FOR the proposed plan of arrangement with Newmont, as previously announced on January 14, 2019. More information on the proposed plan of arrangement with Newmont and the special meeting of Goldcorp shareholders on April 4, 2019 is available at www.goldcorp.com.
Goldcorp also welcomes the announcement that Barrick has agreed to withdraw its proposal to acquire Newmont.
King World News note: The last chart says it all in terms of the gold price. Gold is now at one of the most undervalued points in history. The same could be said of the mining shares.
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.
GOLD the reason for its popularity is its rarity - Gold is a finite commodity - There is only so much of the golden metal available, and it can’t be manufactured.
Some experts, including Goldcorp’s chairman, Ian Telfer, are predicting that the amount of future gold to be mined is already on the decline. The fact that gold mining is on the decline is nothing new. That has happened before. What is worrying some investors is that the world may be running out of physical gold.
Well we got it in time, ex....the futures LT; long term trend normal moves since >500yrs cycles > 7yrs up and 7yrs down > if not manipulated and if manipulated > it fly much higher or fall off the cliff -
Worldwide Major Central Banks are Accumulating Their Gold Holdings Gary Wagner Gary Wagner Friday March 22, 2019 18:20
Note, bottom line.... There is an old adage that you buy when the big boys buy, and sell when the big boys sell. If this adage holds any weight we could be looking for gold pricing to continue to rise in value.
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