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Barrick's Subsidiary Sends Two Shareholder Proposals - Newmont

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(Kitco News) - The latest development in the potential Barrick-Newmont merger is Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) sending a notice of intent to Newmont Mining Corp. (NYSE: NEM) to make two shareholder proposals.

The proposals would be made during Newmont’s next annual meeting of stockholders.

The two items being asked in the proposals are: “To amend Newmont’s by-laws to lower the share ownership threshold necessary to requisition shareholder meetings to 15 percent from the current 25 percent, and to repeal all by-law amendments implemented since October 24, 2018 (there have been none),” Newmont said in a press release on Sunday.

This news comes on the heels of reports stating that Barrick was eyeing a hostile bid to take over Newmont. On Friday, Barrick confirmed in a two-sentence announcement that it has “reviewed” a potential merger with Newmont but no decision has been made.

“Barrick Gold Corporation today confirmed that the company has reviewed the opportunity to merge with Newmont Mining Corporation in an all-share nil premium transaction. No decision has been taken at this time,” Barrick said.

The Globe and Mail report on the potential merger said that Barrick valued Newmont at around $19 billion.

Barrick’s notice of intent to Newmont was sent on Friday. Newmont added that it is not speculating on Barrick’s intentions.

“Newmont does not intend to speculate about Barrick’s motivations or intentions and reserves all rights with respect to the shareholder proposals,” Sunday’s press release stated.

For more information on what analysts are saying about the potential merger between Barrick and Newmont, read Allen Sykora’s article here.

What About The Newmont-Goldcorp Merger?

Newmont also reminded investors that the Newmont-Goldcorp merger announced in January will be completed in the second quarter and will “create an unmatched portfolio of world-class operations, projects, Reserves, exploration opportunities, and talent,” the press release said.

“Newmont remains confident that the proposed combination of Newmont and Goldcorp represents the best opportunity to create value for its shareholders and deliver industry-leading returns for decades to come,” the company noted.

Newmont also highlighted that the Newmont Goldcorp will “be immediately value-accretive to Newmont’s Net Asset Value and cash flow per share; generate an estimated $75 per ounce in Full Potential cost and efficiency improvements, representing annual anticipated benefits of approximately $165 million per year; create a combined $265 million in expected annual pre-tax synergies and Full Potential benefits representing value creation potential of over $2.5 billion.”

Last week, Newmont released a quarterly earnings report that was stronger than analysts’ expectations. Newmont's fourth-quarter adjusted profit was at $214 million, or 40 cents per share. Analysts were looking for 25 cents a share.

Newmont also projected gold production of 5.2 million ounces for 2019 and AISC at $935 per ounce. Barrick has 2019 production guidance of between 5.1 million and 5.6 million ounces of gold with AISC between $870 and $920 an ounce.

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