Barrick withdraws bid for Newmont, forms joint-venture instead

North American natural resources outfits Barrick Gold and Newmont Mining have agreed to form a joint-venture, combining their mining operations, assets, reserves and talent in the US state of Nevada.

Barrick and Newmont, which rejected an $18bn hostile takeover by its Canadian rival earlier in March, will now join together to capture an estimated $500m in average annual pre-tax synergies in the first five full years of the combination.

Barrick chief executive Mark Bristol said: "We listened to our shareholders and agreed with them that this was the best way to realize the enormous potential of the Nevada goldfields’ unequalled mineral endowment, and to maximize the returns from our operations there.

"We are finally taking down the fences to operate Nevada as a single entity in order to deliver full value to both sets of shareholders, as well as to all our stakeholders in the state, by securing the long-term future of gold mining in Nevada."

Following the completion of the joint venture, the Nevada complex will become the single-largest gold producer in the world, with a pro forma output of more than four million ounces in 2018.

Newmont chief executive Gary Goldberg said: "This agreement represents an innovative and effective way to generate long-term value from our joint assets in Nevada, and represents an important step forward in expanding value creation for our shareholders."

On the back of the deal, Barrick, which also recently acquired Randgold Resources, the world’s largest publicly-traded bullion producer, withdrew its acquisition proposal for Newmont.

As of 1345 GMT, Barrick shares were up 3.55% at $13.40, while Newmont stocks moved ahead 1.48% to $33.71 each.