NewsAlert: Barrick and Newmont sign Nevada joint venture agreement

TORONTO- Barrick Gold Corp. is dropping its hostile takeover offer for Newmont Mining Corp. in favour of creating a joint-venture that will combine the two companies’ mining operations in Nevada.

Under the deal, Barrick will hold a 61.5 per cent stake in the joint venture, while Newmont will own 38.5 per cent.

The two big gold miners have operated independently in Nevada for decades, but previously had been unable on agree on a way to co-operate.

The companies say the joint venture will allow them to capture an estimated $500 million in average annual pre-tax synergies in the first five full years of the combination.

Barrick had launched a takeover offer for Newmont in February but was rebuffed by the company, which countered with its own proposal of a joint venture.

The establishment of the joint venture is subject to conditions, including regulatory approvals, and is expected to be completed in the coming months.