The big story in mining in northern Nevada in 2019 was the formation of a joint venture between Barrick Gold Corp. and Newmont Goldcorp Corp.
The story spanned the entire year. A merger between Barrick and Randgold was completed on Jan. 1, 2019, and Randgold’s CEO, Mark Bristow, became the new CEO of Barrick. The next month, on Feb. 25, Barrick confirmed that it was going to try to acquire Newmont with an approximately $18 billion all-stock deal. This potentially hostile takeover bid ultimately appeared to be a way to push the two companies into joining their Nevada operations together into a joint venture – an idea that had been talked about for many years, but which had never come to fruition.
After the Feb. 25 announcement of the takeover bid, there was rapid progress. On March 11, Bristow was in Elko for a breakfast reception to announce the joint venture. The name, Nevada Gold Mines, was announced on May 8 and the joint venture went into effect July 1.
Nevada Gold Mines is by far the largest gold producing complex in the world. Barrick’s and Newmont’s Nevada mines produced just over four million ounces of gold in 2018.
Lots of work has gone into joining together the IT and HR and all of the other aspects of the Nevada operations of two big companies. The Barrick and Newmont employees in Nevada officially became Nevada Gold Mines employees with the start of the payroll period on Dec. 23.
Since the announcement of the takeover bid, there have been a lot of concerns over what joining Barrick and Newmont would mean for the economy and the community of northern Nevada. Sure, a joint venture might be good for profits and investors, but what would it really mean for miners at the sites, the people working in the mining offices, and the businesses and people involved in the many aspects of the mining supply chain?
In a March 5 story on the battles between Barrick and Newmont over their merger proposals, Elko County Commissioner Cliff Eklund said, “I don’t know that one big conglomerate would be in the best interest of the county,” and Elko Mayor Reece Keener said, “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.”
In that same story, a statement from Barrick spelled out reasons why a Barrick/Newmont combination would be good for northern Nevada’s economy and communities, making points that would continue to be emphasized throughout the remainder of the year: “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.”
Some attitudes did begin to change as the joint venture moved forward.
“I think that a lot of the nervousness has calmed down,” Keener said in August. “I think overall things are going to work out well. They still have a lot of work to do, obviously. … They’ve got all the right people in the right seats, they just need to get everything flowing right, and it takes a while, with any new organization.”
Nevada Gold Mines employs a total of about 7,000 people. When the joint venture got started in July, there was a reduction in personnel of about 130 people, most of them in the technical and senior management levels, mainly because of the duplicated roles that Barrick and Newmont employees had. Many of these people stayed with Newmont and moved to other cities. Since July, some more roles have been reduced through attrition and moving people around.
On the other hand, Nevada Gold Mines Executive Managing Director Greg Walker said in November that Nevada Gold Mines was looking to hire more than 200 people to work at the mine sites.
Exactly what the joint venture will mean for everyone involved in the supply chain is still shaking out. In an April 6 story on the potential impacts of the joint venture on mine vendors Keener said, “Initially, fear, uncertainty and doubt were running rampant. Now that some time has elapsed, and the shock has worn off, I think there’s a growing realization of the fact that there will be significant changes in the JV’s supply chain that will impact Nevada vendors. … The onus will be on suppliers to adapt to the new environment to optimally position their goods and services offerings to best compete.”
Keith Jones, general manager of Small Mine Development, said, “People are concerned, and in some cases, there is optimism.”
Barrick announced in November that they had budgeted $311 million in near-term annual synergy savings for the Nevada Gold Mines joint venture, including $115 million in supply chain savings. The goal is to realize about an additional $150 million in synergy savings, for a total joint venture synergy savings of about $450 million a year.
There are a lot of different thoughts and conversations about the joint venture percolating through the northern Nevada community.
The Mining Minds podcast is a new venture which got started in July. Several people involved with the mining industry record the podcast in Spring Creek, and they have guests on the show and talk with them about their lives and their journey through mining. The podcast now has thousands of listeners around the country. A new episode is available every Wednesday morning.
Often the hosts will ask the guest late in the show what their thoughts are on the joint venture. There has been a range of responses.
During the Nov. 13 podcast, guest Steve Martinez said, “My opinion is, as far as financially, it makes sense. It makes great sense. Why put that fence up with roadblocks, hey, you can’t go here, because it’s my property. If it continues on and helps people out, and continues our jobs, let’s do it. I don’t have a problem with it.”
Martinez said the joint venture can give more choices to people working for the mines.
“For example, out at Long Canyon, I can go to Cortez and transfer, and all my time will go with me. I can go to Goldstrike, I can go to Carlin, or if I want to go to Winnemucca, or go to Turquoise Ridge. It opens up doors, where you don’t have to make changes, and your time goes with you, everything goes with you.”
During the Dec. 18 podcast, guest Thomas Sutton expressed a different point of view.
“The whole merger is scary. They now own Elko,” Sutton said. “I guess there’s a lot of fear, there’s a lot of tension, there are a lot of unknowns. There are a lot of things that we don’t know from the hourly end of it that we won’t know.”
Sutton and the hosts talked a little bit about the potential impact of the joint venture on bonuses.
“This whole merger is affecting real people,” Sutton said. “Hopefully they realize that, just as anything we do underground, everything that they’re doing is directly impacting thousands of people.”
With so many changes taking place as the joint venture goes into effect, including changes in medical plans and retirement plans, there are sure to be some changes that people like and some that people do not like. The Elko Daily received complaints from people saying that retirees will no longer able be able to use the clinics in Elko and Winnemucca. The joint venture provided this statement in November:
“Clinic utilization has not been a benefit provided for Barrick retirees and their dependents. There is a change for Newmont retirees, as Newmont was unwilling to subsidize retirees to use the clinic beginning in 2020. If employees accept employment with Nevada Gold Mines, they and their families may continue to utilize the clinic services.”
Those involved in managing the joint venture say they remain focused on promoting beneficial impacts for the employees and the community.
“I think there’s absolutely no doubt that it was the right thing to do,” Bristow said of the joint venture in August. “And the exciting part of this is that the employment base is the real beneficiary.”
“One of my big objectives is to insure that we connect the community and the employees back into the organization, because it’s a very integrated industry,” Bristow said.
“Managing employees’ expectations and making sure you’re a good manager is important part of the business nowadays,” Greg Walker said in November. “You’ve got to make sure that you look after your most valuable asset.”
The Legacy Fund
As the move toward a joint venture between Barrick and Newmont in Nevada became a reality, a lot of people wondered what would happen with the Legacy Fund, the charitable giving fund in which Newmont employees gave more than $21 million to organizations across northern Nevada from 2010 through 2019.
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Rebecca Darling, head of communities and corporate affairs for Nevada Gold Mines, said in November the new Nevada Gold Mines Legacy Fund will be modeled closely after the Newmont Legacy Fund. There is a chance the amount of charitable giving could go up, since the number of employees who can participate in the Legacy Fund is approximately doubling, from about 3,500 Newmont employees to around 7,000 Nevada Gold Mines employees.
Darling said Nevada Gold Mines will also carry on a strong tradition of investing in the community with its two additional tiers of social investment programs – strategic partnerships and workforce community investment committees.
The formation of the joint venture also had a lot of people wondering how Nevada Gold Mines ranch land would be managed.
Newmont and Barrick each had five ranches in northern Nevada, so Nevada Gold Mines has 10 ranches. Nevada Gold Mines is the second biggest landholder in northern Nevada, after the federal government. The mining company owns close to a million acres of ranch land, and with the federal grazing allotments added in, they have close to five million acres.
George Fennemore, Nevada Gold Mines’ head of permitting, land and ranches, said in August that they were looking at ways to combine the best ranch management practices of the two companies. He explained that Newmont’s ranches were primarily run by Newmont employees, whereas Barrick leased some of its ranches to sole proprietors.
“We’re striving to create a system where we put the best people on the ranches, whether they’re a lessee or an employee, to get the best results for what we’re trying to do,” Fennemore said. “So we’re taking a look at what’s the purpose of each of the properties that we have, and who is going to be the best person on that land.”
Nevada Gold Mines invited Gov. Steve Sisolak to take a tour of the Cortez Gold Mine to learn more about the mining industry, and he came to northern Nevada for the mine tour on Aug. 6.
“I had a great time on the tour and I learned so much,” Sisolak said to a crowd of local, regional and tribal leaders that evening.
“It’s absolutely amazing to see the investment that is made in this community,” Sisolak said.
“I think we all as a group need to do a better job educating people about how important mining is to the state of Nevada,” he said.
Sisolak said he has committed state resources to get the message to high schools about the opportunities in mining.
Bristow commented that in just a little over a month since Nevada Gold Mines started on July 1, the joint venture hosted a tour for the governor and also hosted an unsolicited visit from U.S. Interior Secretary David Bernhardt, to the Cortez Gold Mine on July 23.
“So that’s not bad,” Bristow said. “Again, there’s a recognition of the importance of this part of the world.”
It’s been a good year for the price of gold. Prices started the year in the $1,270 to $1,340 per ounce range, but then began to climb in June, and rose above $1,500 an ounce on Aug. 14. The price went back under $1,500 an ounce in September, but was back up at the end of the year, and closed at $1,510.80 on Dec. 27.
Richard Baker, who writes the Eureka Miner’s Market Report, made a “beer bet” that gold will top $1,600 by July 4, 2020. He said some people ask him why he isn’t even more optimistic.
“2020 will no doubt be an exciting year in the markets,” Baker wrote. “Get ready for a roller-coaster ride, pardner. I remain bullish gold!”
A variety of exploration projects are progressing around the state, with some promising results.
Nevada Gold Mines Executive Managing Director Greg Walker said in November that Nevada Gold Mines has increased its budget for exploration in 2020, and will be focusing on exploration around their current gold mines.
“There are a lot of opportunities,” Walker said.
The winter issue of the Mining Quarterly had stories on two exploration projects which have been seeing good results – Gold Standard Ventures’ Railroad-Pinion project in the Carlin Trend in Elko County, and U.S. Gold Corp.’s Keystone project in the Cortez Trend in Eureka County.
U.S. Gold’s project geologist, Ken Coleman, commented that this year’s higher gold prices and the current political climate are leading investors toward gold as a safe investment.
In other U.S. Gold Corp. news this year, former U.S. Interior Secretary Ryan Zinke joined the company’s board in April.
“I look forward to joining a winning team,” Zinke said in a press release.
Mine sites emphasize that safety is always their top priority, and 2019 saw some good mining safety news. However, this year northern Nevada experienced a tragic fatal accident when a bus carrying Nevada Gold Mines miners to work collided head-on with an ore-hauling truck coming from a mine.
The good news in safety is that the Mine Safety and Health Administration reported that there were no mining fatalities in the state of Nevada in 2019. There was a fatality at the Gold Bar Mine in Eureka County on May 13, but on June 26 MSHA rescinded its earlier report and said its investigation determined that the miner had died from natural causes.
“The fatality is not chargeable to the mining industry,” MSHA said.
As of Dec. 30, MSHA reported a total of 23 mining deaths throughout the United States in 2019 – the lowest number on record. The previous low was 25 deaths in 2016. There were 28 deaths in 2017, and 27 in 2018.
This summer’s bus-truck accident took place shortly before 6 a.m. Saturday, Aug. 24, on State Route 766 about six miles north of Carlin. The driver of the ore truck and a passenger in the bus were killed. Of the 21 people on the bus, 14 were cared for at Northeastern Nevada Regional Hospital in Elko, and six were sent for treatment to Reno and Salt Lake City.
The bus was operated by Coach USA, and the truck was a Pilot Thomas Logistics truck.
Nevada Gold Mines set up a fund, and $117,000 was raised in support of employees affected by the crash.
Walker said in November that in addition to the two fatalities, four people on the bus were very seriously injured in the accident. He said 11 people involved in the accident had not yet returned to work because of the physical or emotional effects of the accident.
Walker said Nevada Gold Mines has been taking many steps in response to the accident, including looking at ways to improve the safety of the road and ways to reduce the number of trucks when buses are on the road.