By Alistair MacDonald 

Talks between Barrick Gold Corp. and Newmont Mining Corp. have ended, marking another failure in the long history of merger talks between the world's two largest gold miners and leaving them both still facing the sector problems that the combination had hoped to partly alleviate.

The latest round of talks ended acrimoniously, with Newmont taking a swipe at Barrick Co-Chairman John Thornton in the letter to Barrick's directors that said a "constructive, mutually respectful" relationship didn't exist between the two companies.

In a follow-up release, Toronto-based Barrick said Newmont tried to renegotiate three "foundational" elements of a deal that both had signed on April 8.

The Wall Street Journal reported that the two sides were close to a deal earlier this month , but talks stumbled over plans for a spinoff of some assets.

Recent informal contact had failed to bring the two sides to a deal that would have seen Barrick take over its U.S.-based rival by offering its shareholders a premium of 13% over Newmont's share price, according to people familiar with the matter.

The two sides have talked on and off for two decades and could do so again.

In the letter to Barrick's board, dated April 25, Newmont Chairman Vincent A. Calarco said Mr. Thornton had twice told Newmont last Thursday that the talks were "dead." Mr. Calarco appeared to also criticize Barrick Chairman Peter Munk for saying in a newspaper interview that Newmont was "extremely bureaucratic and not shareholder friendly."

Barrick shot back later Monday, saying that after signing a term sheet, Newmont had tried to renegotiate the location of the merged company's head office; the identification of any specific assets that would be included in a spinoff company; and governance arrangements, such as the roles and authority of the company's new chairman, the lead director and the chief executive officer.

Among the governance disagreements was whether Mr. Thornton would be executive chairman or just chairman, according to a person familiar with the matter.

A spokesman for Newmont said the firm didn't renege on what was a "draft summary" of a deal.

The miners had hoped a combination would lead to about $1 billion in cost savings, particularly in Nevada, where the two operate almost side by side in a state that accounts for about 40% of each company's production. While most analysts thought the cost savings would be around $500 million, they had, in general, welcomed the talks.

"Both companies are optimized for the 2000s bull market and this deal would, in our opinion, have been a good first step toward restructuring for the current market," John Bridges, an analyst at J.P. Morgan, said in a research note.

Since late 2011, gold miners have been hit hard by a weaker gold price coupled with continued high costs. That followed a decadelong boom that saw aggressive empire building, which miners are still paying for in write-downs. Large gold miners face another problem: increasing gold production in a world where new high-grade deposits of the yellow metal are being found with less regularity. Given such difficult times, some investors saw the merger talks as a sign of desperation from two struggling giants.

"It's the equivalent of two drunks holding each other up so they both don't fall down on their own," said Paul Sassi, a fund manager at CJG Asset Management in New York and former Barrick investor.

At the heart of the sector's troubles: gold futures have fallen 30% since they peaked in August 2011. While gold is up year-to-date, most gold watchers expect the metal to end the year flat to lower, as Chinese demand falters and as the U.S. Federal Reserve winds down its efforts to stimulate the economy. That stimulus had supported gold, which is used by investors as a hedge against the inflation that such efforts can spark.

Underscoring how investors have fled the sector, shares in both companies have lost even more value, falling by around 64% in the same time period.

The gold rout has exposed how strained many gold miners' balance sheets have become, with some of the highest debt levels in the mining sector and billions of dollars' worth of equity write-downs. Last year, gold miners wrote down $36 billion of value, according to BMO Capital Markets. Almost a third of that came from Barrick.

The Toronto-based company has written off more than $6 billion on one project alone, the Pascua-Lama project that straddles the border between Argentina and Chile. Its problems with the giant mine aren't over, given its construction is on hold.

Newmont, too, has troubled projects. In Indonesia, the miner faces a ban on the export of its copper concentrate, the crushed ore that is usually smelted into sheets of pure copper, as the government there looks to force miners to do the refining within the country.

Projects like Pascua-Lama were conceived when the price of gold was high enough to make expensive mines in isolated corners of developed markets worth the risk.

The quality of gold being found in easy-to-access places has been falling. The average grade of gold finds has gone down from 2.6 grams of gold per ton in 2001 to 1.69 grams per ton last year, according to data from by Raw Materials Group. The decline in grades in the gold sector have been greater than in most other metals.

The failure of the talks deprives Mr. Munk of a final deal before he retires from the company he created three decades ago. One of Canada's best known businessmen, Mr. Munk said Barrick has made at least three other attempts to merge with Newmont since the early 1990s.

"For 30 years...Barrick has been my dream, my passion," he said in an interview last week. "I don't think of much else. This is my life."

Write to Alistair MacDonald at alistair.macdonald@wsj.com

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