Barrick Gold Corp. and Newmont Goldcorp Corp. have cleared a major step toward creating a joint venture for their Nevada mines. They announced April 22 that all regulatory conditions have been met, but there is still more to do.
The companies reported the U.S. Federal Trade Commission granted an early termination of the waiting period under the Hart-Scott-Rodino Act on April 19, but the two must complete all the steps to integrate the Nevada assets.
“We’re still working toward a close in June,” Nevada-based Leslie Maple, manager of communications and corporate affairs for Barrick, said in a phone call April 22.
The joint venture will become a new business yet to be named, according to the companies. Barrick will be the operator of the mines that combined produced more than 4 million ounces of gold last year. Barrick will hold 61.5 percent of the JV and Newmont, 38.5 percent.
“The joint venture agreement represents a historic accord between our companies that will unlock the enormous geological potential of the Nevada goldfields and maximize its many value-creating opportunities,” Barrick Chief Executive Officer Mark Bristow said in the announcement.
Newmont Goldcorp’s CEO, Gary Goldberg, said that “by combining our operations and assets in Nevada we will be able to extend profitable production, lower costs and create new opportunities for our stakeholders in the region.”
Barrick and Newmont have said they expect to achieve $500 million a year in pre-tax synergies under the joint venture, which covers Barrick’s Cortez, Goldrush, Goldstrike, South Arturo mines in Nevada and Newmont Goldcorp’s Carlin, Long Canyon, Phoenix, Twin Creeks, Emigrant and Lone Tree mines.
Barrick and Newmont already have a joint venture for Turquoise Ridge, with Barrick holding 75 percent and the operator, and Newmont owning 25 percent and processing the ore at its Twin Creeks Mine.
During a visit to Elko in March, Bristow said there will be savings in different areas of the operations, but that the impact on the workforce should be minimal. There could be overlap in management, however, although Bristow said then that “it makes no sense for Newmont and Barrick to seek to get rid of any expertise.”
Bristow said the savings could be in ore processing costs, warehousing, railheads and roads with more direct travel. He also said earlier there could be savings in reaching ore deposits that now might require going around the other company’s property.
Newmont laid off 120 employees in January as an effect of a pit wall slide at the Gold Quarry Mine north of Carlin last year and economics at the Emigrant Mine south of Carlin.
Barrick and Newmont announced on March 11 that they had agreed to form a joint venture for Nevada operations. The JV agreement replaced Barrick’s earlier push for a merger of the two companies. Newmont then went ahead with a nearly $10 billion deal to acquire Goldcorp Inc., and that merger was finalized on April 18.
Barrick and Randgold Resources merged on Jan. 1 of this year.