chevy56 welcome, I agree with; 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).
I think the offer bid for Goldcorp shares are WAY TO LOW - Goldcorp has >60 mil. ounces in reserve and is very undervalued, imo! I voting against the offer!
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.
Goldcorp Inc. (G:TSX; GG:NYSE, US$11.52) looks set to be acquired by Newmont, but not without continuing controversy, particularly over chairman Ian Telfer's egregious "retirement allowance" payment, almost tripled after the acquisition announcement. After my comments last bulletin, I was invited onto BNN/Bloomberg to discuss the merger. See TV interview here. The response was overwhelming, and positive.
Following the noisy opposition, Newmont and Goldcorp announced that Telfer would not be continuing as vice chairman of the combined company. But Telfer keeps his payment. A few Newmont shareholders weighed in, saying Goldcorp should not benefit from the recent Newmont/Barrick Nevada joint venture, and opposing the large payment to Goldcorp's chairman. Goldcorp agreed for current Newmont shareholders to receive an extra cash dividend. But Telfer keeps his payment. Shareholders are down by about two-thirds since Telfer became chairman. But Telfer keeps his payment.
We are holding the shares for now. We have voted our shares against the merger, opposing both the payment but also the sale of the company close at barely one-third the share price when Telfer took over in 2006. Confucius he say: "To receive a salary when you have lost the Way, that is shameful."
Chevy56 Great News: Caledonia lauds Govt on gold price - 16 May, 2019 - 00:05
Tawanda Musarurwa
Toronto Stock Exchange-listed and Zimbabwe-focused mining firm, Caledonia Mining Corporation says it is encouraged by efforts being made by the Government in improving the country’s business environment including the recent setting of a new gold support price.
Last week, Fidelity Printers and Refiners (a subsidiary of the Reserve Bank of Zimbabwe) announced that it had raised the price it pays for gold to US$44 000 per kilogram or US$1 368,55 an ounce.
The new price is a premium of approximately $86 per ounce to the spot price in London.
“Notwithstanding the challenges experienced in the quarter, we remain encouraged by the overall direction of policy development which we believe will result in improved operating conditions and a better investment climate in Zimbabwe.
Central Shaft sinking at Blanket mine expected to be finished in a matter of weeks! Update from @CaledoniaMining following its quarterly results. Mark Learmonth, CFO, speaks to Charlie Gibson on the Bw Business News via @CoreFinanceTV ?? http://ow.ly/27dy50ufNYG #gold #mining
Bw Business News – Mark Learmonth, CFO – Caledonia Mining Core Finance Published on 17 May 2019
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