One week after Barrick Gold officially announced its desire to take over Newmont Mining, Monday was a busy day as the two companies battled over their competing views of how to proceed from here.
Newmont announced Monday morning that they have rejected Barrick’s $18 billion all-stock takeover bid. They also provided a “joint venture term sheet” detailing how the two companies can work together to operate and manage their Nevada assets.
Newmont said shareholders would benefit from the merger of Newmont and Goldcorp which is in the works, along with a joint venture between Barrick and Newmont in Nevada.
Barrick’s initial reaction was dismissive. The company released a statement from Chief Executive Officer Mark Bristow, saying that “Newmont’s latest proposal is essentially based on the stale and convoluted process that foundered previously. As usual, it comes with unrealistic preconditions including swapping the chairmanship and the leadership of the joint venture. Experience has shown us that joint ventures only work well when the majority owner is also the operator.”
Barrick would be the majority owner in a joint venture. Newmont proposed a split of 55 percent Barrick and 45 percent Newmont. Barrick, on the other hand, said that it should control at least 66 percent of a joint venture.
Late in the day Monday, Reuters reported that Barrick CEO Mark Bristow wanted to speak immediately with Newmont about their joint venture proposal.
In the Elko area, there has been a lot of concern about the economic impacts that the merger of the two gold giants could have on the region.
“I think competition is good,” County Commissioner Cliff Eklund said Monday. “I don’t know that one big conglomerate would be in the best interest of the county.”
Eklund and other commissioners praised all that the mining companies have done for the region.
“I am extremely grateful and thankful that we have mining as an economy around here; it provides so much opportunity and so many jobs and it’s just such a big part of our economic portfolio,” Commissioner Delmo Andreozzi said. “All of the mines around here do a lot of corporate giving to a lot of different things, they support a lot of projects that we all benefit from. You don’t know what the impact would be if (Barrick and Newmont) were just one company — would we see some adverse effects from that?”
Elko Mayor Reece Keener said he has received only affirmative feedback since a story in last week’s Elko Daily Free Press shared his concerns about the possible negative impacts of a Barrick-Newmont merger.
“As Elko Mayor, I’m compelled to evaluate any such mergers through the prism of ‘what’s best for Elko’s future,’” Keener wrote in an email on Monday. “My conviction remains that a dual, competing mine operator model has worked very well for Elko for more than a decade and it represents our best option for continued prosperity in the future.
“Elko is a major stakeholder caught in the crosshairs of these high-stakes merger negotiations. My hope is that both entities will take into account the massive, regional economic implications of their actions, and consider the thousands of dedicated employees and contractors that have developed the world-class mining assets that are now the subject of boardroom brawling,” Keener wrote.
Barrick, on the other hand, asserted that a Barrick-Newmont merger would be good for Nevada. One of the Barrick documents released Monday said that “Nevada will form the absolute core of a combined Barrick/Newmont, which will result in significantly more capital invested to maximize the geological potential of Nevada. A combined company would have lower-cost operations, which will lower the cut-off grades of reserves and resources, and result in much longer-term and more-profitable mines. This would mean longer-term employment for our employees, greater business for our suppliers and local communities, and more cash flow to invest in the discovery and development of new mines — all of which benefits the economy of Nevada. The Newmont/Goldcorp transaction does nothing for Nevada, and their assets will compete for capital that could otherwise be invested in Nevada.”
John Dobra, a retired University of Nevada, Reno economics professor, said that although it is impossible to be sure what will transpire if a merger does take place, he thinks it is likely that there would be some consolidation at the headquarters and in local management and in areas of the company where there is duplication, but there probably wouldn’t be that much of a loss of jobs locally in the Elko area.
“They are not going to touch the people who are driving trucks and operating shovels, because they are the ones who make the money,” Dobra said.
If Barrick wants to proceed with a hostile takeover, Dobra said, they will probably have to come up with more money.
“Barrick is not even offering fair value for the (Newmont) stock,” Dobra said.
Barrick’s statements have said that Newmont stockholders would benefit from the merger because of the cost savings which the combined companies would end up seeing.
“I’m seeing comments from shareholders saying ‘I want four of Barrick for one of my Newmonts,’” Dobra said. “But Barrick is only offering 2.6. Barrick has got to sweeten the deal considerably.”
Dobra looked back to when there was an attempt at a Newmont takeover more than 30 years ago, and the company’s stock went from about $35 to $105 in about six weeks. The group seeking to take over Newmont brought in Texas oilman T. Boone Pickens to provide an influx of cash. Newmont ended up selling its non-gold assets to raise the capital it needed to retain the gold portion of its business.
“They said we’re going to bet it all on gold, and they paid off Pickens and everyone else that had jumped in,” Dobra said.
ELKO – Mountain snowpack is running well above normal in northeastern Nevada but not as heavy as it was two years ago.
Snowpacks range from 123 percent of normal in the Clover Valley and Franklin River basins to 149 percent of normal in the Lower Humboldt River basin, according to data released Monday by the USDA’s Natural Resources Conservation Service.
The snow water equivalent as of March 1 stood at about 16 inches, compared with a normal mark of 13 inches and March 2017’s mark of 18 inches.
Mountain snowpack generally peaks in March of each year and begins declining significantly in April.
Snow depths in the Upper Humboldt River basin included 50 inches at the 7,700-foot elevation in Lamoille Canyon and 80 inches at the 8,700-foot elevation. The 17 inches measured at Tremewan Ranch (5,700 feet) was 320 percent above normal.
Overall, the Upper Humboldt stood at 138 percent of normal.
Snow depths in the Lower Humboldt basin included 32 inches at Midas, which is three times the average amount.
Taylor Canyon, at an elevation of 6,200 feet in the Owyhee River basin, had a snow depth of 29 inches. That’s twice the average amount for March 1. Overall, the Owyhee basin stood at 130 percent of normal.
The Snake River basin in northeastern Elko County was at 124 percent of normal.
Eastern Nevada was listed at 134 percent.
Although March brings the arrival of spring, more snow usually falls before the irrigation season. This year is no different, as the National Weather Service was predicting additional precipitation throughout this week.
The forecast calls for additional rain and snow, along with rising temperatures.
ELKO – A truck carrying about 4,000 gallons of diesel fuel to Barrick’s Cortez mine was struck by a train Saturday morning when it failed to clear the tracks in time, according to the Nevada Highway Patrol.
The crash at about 6:30 a.m. resulted in a fuel spill at the crossing about five miles south of the Beowawe exit from Interstate 80.
The NHP said the Pilot Thomas Logistics truck was traveling south on State Route 306 when the collision occurred. The train did not derail, and no one was injured. The road was reopened Saturday afternoon.
The trucking company reported that the site was being cleaned up by Union Pacific Railroad with support from Pilot Thomas and oversight by the Nevada Department of Transportation.
“Pilot Thomas and Barrick are fully cooperating with authorities,” the company said.
The highway patrol is assisting Union Pacific with the crash investigation.
UPDATE: Court officials announced this case was continued Tuesday morning partway through the jury selection process and will be tried at a later date.
ELKO – Jury selection begins Tuesday morning for a man accused of being involved in the robbery of a Dotty’s Casino a year ago.
Tony A. Pressler, 37, of Spring Creek is scheduled to go on trial in Elko District Court on seven counts in connection with the March 2, 2018 crime.
At the time of his arrest, Elko police said Pressler was believed to have been the taller of two people shown in surveillance video wearing masks as they entered the casino.
According to court documents, however, Pressler is accused of aiding and abetting James Squires and another suspect yet to be charged in the robbery by texting them to let them know when to enter the casino to commit the robbery.
The robbery occurred at 6:50 a.m. at Dotty’s in the Smith’s shopping center. A chemical agent thought to be bear mace was sprayed at employees and customers before the two people in masks got away with an undisclosed amount of cash.
Police and firefighters were called to Dotta Drive to extinguish a vehicle fire minutes after the robbery. The vehicle was believed to be connected with the crime.
Squires, 34, of Elko was arrested a week after the robbery. He pleaded guilty in district court on June 25 and was sentenced by Judge Al Kacin to three to eight years in prison on one count of robbery, and 28 months to six years in prison on one count of grand larceny, to be served concurrently. He was also ordered to pay $57,524 restitution to Dotty’s Casino.
An amended criminal complaint charges Pressler with two counts of principal to robbery with use of a deadly weapon, principal to burglary with the use of a deadly weapon, principal to assault with a deadly weapon, principal to grand larceny, and conspiracy to commit robbery, all category B felonies.
Since then, Pressler also has been charged with attempted murder following a Dec. 31 incident in which he allegedly tried to hit an Elko police officer with a vehicle.
Charges in that case include attempted murder with use of a deadly weapon (vehicle), attempted murder, assault with a deadly weapon, two counts of eluding a police officer in a manner posing danger to persons or property, grand larceny of a motor vehicle, and unlawful taking of a motor vehicle.
Pressler’s trial in the robbery case is scheduled to last all week in Kacin’s court.