Newmont Mining and Goldcorp have entered into an agreement, which will see Newmont acquire Goldcorp for US$10 billion.

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.

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

According to a company statement, Newmont Goldcorp expects to generate up to US$100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through its proven Full Potential continuous improvement program.

The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share.

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 per cent, 15 per cent and 10 per cent, respectively.

Newmont Goldcorp will also prioritise project development by returns and risk, while targeting US$1.0 to US$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.

“This combination creates the world’s premier gold company,” said Goldcorp’s President and Chief Executive Officer, David Garofalo. “The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction’s value proposition for all of our stakeholders.”

Newmont Goldcorp will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production.

Source: www.newmont.com