Golden Rim

Newmont Mining Corporation has entered into a definitive agreement to acquire all of the outstanding common shares of Goldcorp in a stock-for-stock transaction valued at US$10 billion.

Under the terms of the agreement, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

The agreement will combine two gold industry leaders into Newmont Goldcorp, to create an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector.

Newmont Goldcorp’s world-class portfolio will feature operating assets in favourable jurisdictions, an unparalleled project pipeline, and exploration potential in the most prospective gold districts around the globe.

In addition to providing shareholders the largest gold Reserves per share, Newmont Goldcorp will offer the highest annual dividend among senior gold producers.

“This combination will create the world’s leading gold business with the best assets, people, prospects and value-creation opportunities,” says Gary Goldberg, Newmont’s CEO.

“We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline.”

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement programme.”

“The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share. We constantly review opportunities to raise our performance, and this combination represents the most promising path to deliver superior and sustainable value for our shareholders, employees, host countries and communities.”

Newmont Goldcorp’s Reserves and Resources will represent the largest in the gold sector and will be located in favourable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75%, 15% and 10%, respectively.

Newmont Goldcorp will also prioritise project development by returns and risk, while targeting $1.0 to 1.5 billion in divestitures over the next two years to optimise gold production at a sustainable, steady-state level of six to seven million ounces annually.

Supported by stable, profitable long-term production and an investment-grade balance sheet, Newmont Goldcorp will generate robust free cash flow and have the financial flexibility to fund project development and exploration in the decades ahead.

“This combination creates the world’s premier gold company,” says Goldcorp’s President and CEO, David Garofalo.

Strategic rationale 
The combination of Newmont and Goldcorp will create the world’s leading gold company offering shareholders and other stakeholders:

  • Experienced management and talented mining professionals with a proven track record of maximizing value by delivering long-life and low-cost profitable gold mining operations
  • Unparalleled leverage to the gold price given the combined company’s scale (2017 gold production actuals: Newmont = 5.3 million ounces; Goldcorp = 2.6 million ounces)
  • A world-class portfolio of gold mining operations and projects in favorable jurisdictions
  • Steady, profitable gold production targeting 6 to 7 million ounces over a decades-long time horizon
  • Recognized industry leadership in environmental, social and governance performance
  • A targeted sustainable annual dividend of $0.56 per share,1 the highest among senior gold producers
  • A solid, investment-grade balance sheet
  • An unparalleled project pipeline on four continents
  • Exploration opportunities in the world’s most prospective gold districts
  • The sector’s largest gold Reserves and Resource base

Structure and long-term leadership succession 
Following the merger, management of Newmont Goldcorp will feature proven and experienced mining and business leaders at both the Board and executive team levels, along with diverse, high-performing teams at the combined company’s regional and operating sites.

Newmont Goldcorp’s management team will be appointed on a “best talent” basis, with Gary Goldberg as CEO and Tom Palmer as President and COO.

Building on the depth of Newmont Goldcorp’s combined global talent pool, the board will continue to focus on strategic leadership development, robust and thoughtful succession planning, and seamless leadership transitions.

As part of a planned and orderly leadership succession process, Goldberg and Newmont’s board have been engaged in discussions anticipating a CEO succession in early 2019.

In October of 2018 the Company also announced  Palmer’s promotion to President and COO.

To ensure a smooth and successful combination, Goldberg has agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies.

The company expects this process to be substantially completed in the fourth quarter of 2019, when Goldberg plans to retire and Palmer will become President and CEO.

Path to close 
The boards of directors of both companies have unanimously approved the transaction, including in the case of Goldcorp, on the unanimous recommendation of a special committee of independent directors of Goldcorp.

The transaction is expected to close in the second quarter of 2019. Closing of the transaction is subject to approval by the shareholders of both companies; regulatory approvals in a number of jurisdictions including the European Union, Canada, South Korea and Mexico; and other customary closing conditions.