Newmont, Goldcorp Complete Merger To Form Largest Gold Producer
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(Kitco News) - It's official – Newmont Mining Corp. and Goldcorp Inc. have completed their merger to form Newmont Goldcorp Corp. (NYSE: NEM, TSX: NGT), thereby creating what officials have said will be the world's largest gold-mining company.
Company executives have repeatedly said they envision 6 million to 7 million ounces of gold production per year over a decades-long time horizon.
"We've met our goal to become the world's leading gold business, and we'll maintain that position by executing our winning strategy," said Gary J. Goldberg, chief executive officer, in a prepared statement. "That strategy focuses on constantly improving safety and efficiency at our current operations while we continue to invest in expansions and exploration to fuel next-generation production.
"An equally important part of that strategy is to meet stakeholders' expectations by continuing to lead the sector in value creation and sustainability performance."
Officials have said the merger 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%. They have also touted an expected $365 million in annual pre-tax synergies, supply-chain efficiencies and other improvements.
Officials have also said the company will have the largest reserves and resources in the gold sector, with properties located in areas considered to be favorable mining jurisdictions.
Shareholders of both Newmont and Goldcorp voted earlier this month voted in favor of measures required for the merger to go ahead. The merger clears the way for Newmont's previously announced one-time special dividend of 88 cents per share to be paid on May 1 to Newmont shareholders of record as of April 17. This is meant to provide a benefit to Newmont shareholders from expected synergies as a result of a joint venture with Barrick Gold Corp. for the two companies' mines in Nevada.
"Ultimately, our goal is to leverage a more prolific portfolio and an even richer talent pool to generate superior value over the course of decades," said Tom Palmer, president and chief operating officer of Newmont Goldcorp, who has been tapped to become CEO sometime in late autumn or early winter when Goldberg retires.
This is the second blockbuster merger completed in the gold-mining industry this year. The other was Barrick's acquisition of Randgold Resources Ltd.