The structure of the gold industry has changed with the announcement of a second blockbuster merger in January.
The first was the Barrick Gold Corporation-Randgold Resources combination announced last September. Not to be outdone by Barrick, Newmont announced plans to acquire fellow senior producer Goldcorp in an all-stock deal valued at $10 billion to create the world’s largest gold company.
Like Barrick, Newmont intends to sell non-core mines to focus on a smaller portfolio of larger, higher quality properties. However, the new Newmont will have 21 mines (Barrick has 13), so integrating Newmont with Goldcorp will be a challenge.
That said, Newmont is acquiring an excellent suite of assets at a discount and Goldcorp shareholders will get the quality management they have long been waiting for.
Gold Spot Rate vs. Newmont Mining vs. Barrick Gold vs. Goldcorp
Source: Bloomberg.
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