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Newmont Shareholders OK Proposals For Goldcorp Takeover

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(Kitco News) - Shareholders of Newmont Mining Corp. (NYSE: NEM) voted Thursday to approve the issuance of new shares for the proposed takeover of Goldcorp Inc. (TSX: G, NYSE: GG), Newmont announced.

Goldcorp shareholders likewise approved the merger last week, with 97% in favor.

Officials have said the combined company -- to be named Newmont Goldcorp – will be the largest gold producer in the world and also have the most gold reserves per share, based in countries considered to be favorable mining jurisdictions. Annual output has been projected to be 6 million to 7 million gold ounces over a decades-long time frame.

Newmont said a proposal to its shareholders to increase authorized common stock required an OK from the majority of shares outstanding, whereas the proposal to issue shares for the transaction required a majority of votes cast. Newmont shareholders approved the increase in common stock with more than 76% of the outstanding shares voting for the proposal, while the issuance of shares for received more than 98% of the votes.

“We thank Newmont’s shareholders for their overwhelming support for this compelling value-creation opportunity as we build the world’s leading gold company,” said Gary Goldberg, chief executive officer for Newmont, in a prepared statement.

Newmont said approval of the merger by both Newmont and Goldcorp shareholders clears the way for Newmont’s previously announced one-time special dividend of 88 cents per share. This will be paid on May 1 to Newmont shareholders of record as of April 17.

The company announced this special dividend after complaints that Goldcorp shareholders would be getting some of the benefit of the synergies from Newmont’s joint venture with Barrick Gold Corp. for the two companies’ operations in Nevada. Barrick initially made a hostile bid to take over Newmont before the mining giants agreed on a joint venture instead.

Newmont said the merger with Goldcorp will be accretive to Newmont’s net asset value per share by 27% and to the combined company’s 2020 cash flow per share by 34%. Officials said they expect $365 million in projected annual pre-tax synergies, supply-chain efficiencies and other improvements.

Newmont has said Goldberg would lead Newmont Goldcorp through the closure of the transaction and integration of the two companies, expected to be completed in the fourth quarter. At that time, Tom Palmer, who will be president and chief operating officer, will become president and CEO of the new company.

This is the second blockbuster merger in the gold-mining industry in since autumn. Barrick acquired Randgold Resources Ltd., with the merger going into effect at the start of the year.

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