Newmont Mining Corp says early joint venture (JV) talks with Barrick Gold Corp. have gone well.
In an e-mail to The Globe and Mail, a Newmont spokesperson said the discussions were “constructive” and a “good starting point”.
Newmont’s chief executive officer Gary Goldberg and his counterpart at Barrick, Mark Bristow met Tuesday night for dinner in New York to try to hash out a JV in Nevada that could head off a protracted hostile takeover spat.
Just over a week ago, Barrick proposed a US$17.8-billion no-premium takeover of Newmont that would thwart Newmont’s efforts to buy Goldcorp Inc. for US$10-billion.
On Monday, Newmont’s board officially rejected Barrick’s proposal and instead proposed a JV in Nevada with Barrick.
If the two can reach agreement, Barrick’s CEO Mr. Bristow said he will consider dropping the offer for Newmont.
The Newmont spokesperson said that Mr. Goldberg would be in “back-to-back meetings” with investors on Wednesday and he didn’t know whether there would be additional JV exchanges with Barrick on Wednesday.
Shares in both Newmont and Barrick have rallied in recent days indicating that investors like the idea of the two coming to an agreement on a JV.
Joe Foster, portfolio manager with VanEck, Barrick’s biggest shareholder, told The Globe and Mail that he believed a JV “creates the most value for shareholders.” He said he was weary of Barrick pursuing a takeover of Newmont because there are “no guarantees that you are going to see the value that is promised.”
Mr. Bristow has argued that a Barrick takeover of Newmont would generate at least US$750-million in cost savings over the first five years, but Mr. Goldberg has expressed skepticism over the figure.
The miners both have giant adjacent mines in Nevada and both have operated in the state for decades.