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Barrick Gold Corp. is hoping to merge with Newmont Mining Corp. in a deal that could save both of the gold giants some money but at the same time leave northeastern Nevada shortchanged.

We’ve heard rumors year after year about these two mega-companies combining, so it was no surprise at the end of last week when another merger story made headlines. Everything changed on Monday, however, when Barrick announced a firm proposal that was quickly branded as “hostile.”

If the deal goes through, the impact on the daily lives of many local residents could be felt more than if Amazon and Walmart were to join forces.

“A single mining behemoth would remove much of the competition for talent and potentially put downward pressure on wages, and it would certainly squeeze the supplier community,” Elko Mayor Reece Keener told the Elko Daily Free Press when asked about the proposed merger. “The entire region has benefitted from two major miners, and consolidation into one operator could bring about adverse effects in our community,” he added.

As Barrick pointed out, the deal makes sense in Nevada because of the potential for billions of dollars worth of synergies between operations. The company released a map showing the quilt of mining properties operated by Barrick and Newmont from Winnemucca in the west to Long Canyon in the east.

Indeed, the two companies already have a joint venture at Turquoise Ridge, where Barrick owns the mine and 75 percent of the project while Newmont process the ore for the remaining 25 percent. And they are each 50 percent owners in the Kalgoorlie Consolidated Gold Mine in western Australia.

More arrangements like that could be forthcoming.

“Newmont has consistently communicated to Barrick its willingness to explore value-generating opportunities for the companies’ Nevada assets,” Newmont stated in response to Barrick’s $17.8-billion all stock bid. However, Newmont added that Barrick’s estimation of cost reductions under a merger was “unsubstantiated” and fails to account for cost reduction initiatives Newmont has already implemented at various operations, including in Nevada.

The proposal comes on the heels of Barrick’s merger with Randgold and in the midst of Newmont’s planned merger with Goldcorp. Newmont listed several reasons why it prefers to proceed with the Goldcorp merger and reject Barrick’s offer.

Major shareholders will have to make up their own minds. The Financial Times reported that the biggest active shareholder in both Barrick and Newmont, the German fund manager Flossbach von Storch, “has thrown its support behind the merger of the two long-term rivals but only if they can come to an amicable agreement.”

The article pointed out that synergies in the Barrick deal are estimated to be more than four times greater than those with Newmont’s Goldcorp deal.

But an opinion columnist at Bloomberg called Barrick’s synergy estimates “rubbery” and said Newmont wouldn’t get “anything they want that they don’t already have.”

The average Elko resident has less interest in the financial maneuvers behind the scenes than what might happen here on the ground.

Elko and the rest of northeastern Nevada have benefitted greatly from the healthy competition between these two companies for decades. Individually, the have provided high-paying jobs and driven the local economy upward, while contributing generously to our schools and nonprofit organizations.

While it is perfectly natural for such large companies to merge, particularly when it will save both of them money, no mention has been made of any benefit it would create for the men and women who do the work here in rural Nevada, from the top of the scale to the bottom.

As long as they are left out of the equation, it would be better if the hostile takeover were nothing more than a rumor.

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