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Barrick Presentation Reiterates Synergies From Newmont Merger

Kitco News

Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) is continuing to tout the synergies as a major benefit to its proposal earlier this week to acquire Newmont Mining Corp. (NYSE: NEM) in an all-stock deal. Barrick posted a presentation to its website, titled “Capturing the Missing Billions,” which includes graphics and builds upon the points chief executive Mark Bristow made in a conference call on Monday. In particular, the deal projects over $7 billion in “real synergies” revolving largely around assets in Nevada, where both companies have a major presence. “Barrick has the majority of high-grade reserves and resources and Newmont has the majority of processing-plant capacity and infrastructure,” Barrick says. Thus, a merger of “highly complementary assets enables optimization across the complex, providing the opportunity to unlock 20-plus years of profitable production in Nevada.” The report says there would be a reduction in corporate and regional general and administrative expenses, plus a merger would allow for exploration to be focused on “priority regions,” meaning a one-third reduction in the two companies’ combined exploration and project spending. Meanwhile, Barrick downplays the potential for joint venture instead, commenting that this would not capture all Nevada synergies and “a true JV of the scale and complexity of the Nevada operations would be extremely challenging to implement and 20 years of history suggests may never be achieved.” Further, this would fail to realize $2.4 billion in non-Nevada synergies, Barrick maintains. Newmont management has instead said it favors proceeding with its planned acquisition of Goldcorp Inc. instead. One of the Barrick’s conditions for a Newmont merger would be to scuttle the Newmont-Goldcorp deal.

By Allen Sykora of Kitco News; asykora@kitco.com

 

Osisko Gold Royalties Closes Silver Stream Transaction

Thursday February 28, 2019 08:59

Osisko Gold Royalties Ltd. (TSX, NYSE: OR) says it has closed a silver stream transaction for 100% of the future silver produced from the Horne 5 property in Québec by Falco Resources Ltd. In return, Osisko will pay Falco staged upfront cash deposits of up to C$180 million plus ongoing payments equal to 20% of the spot price of silver on the day that refined silver is delivered, up to a maximum of US$6 per ounce. Upon closing the silver stream, Osisko funded the first deposit. “The addition of the silver stream on Horne 5 brings in a new generation of assets that have the potential to become anchor assets within Osisko’s royalty and stream portfolio,” says Sean Roosen, chair and chief executive officer of Osisko. Horne 5 is located in the former Horne mine, which was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Falco’s 2017 feasibility study for the project estimated annual gold production of 219,000 ounces at US$399 per gold ounce over a 15-year life of mine. Falco is currently in the permitting process and working on obtaining all third-party approvals to advance project construction.

By Allen Sykora of Kitco News; asykora@kitco.com

 

Avino Reports 4Q Profit, Higher Production

Thursday February 28, 2019 08:59

Avino Silver & Gold Mines Ltd. (TSX, NYSE American: ASM; FSE: GV6) reports a fourth-quarter profit as output rose. Net income after taxes was put at $1 million, or 2 cents per share, down from $1.5 million, or 3 cents, in the year-ago quarter. Silver-equivalent production was 720,187 ounces, up from 637,012 in the year-ago period. For full-year 2018, net income was $1.6 million, or 3 cents per share, down from 2.5 million, or 5 cents. Silver-equivalent production rose to 2,863,753 ounces from 2,700,585 in 2017. “Operationally, 2018 was a year in which we successfully achieved our goal of completing Mill Circuit 4 and several drill programs on numerous areas of the Avino property, which successfully outlined longer-term targets that warrant further investigation and drilling,” says David Wolfin, president and chief executive officer.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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