Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
and Goldcorp Inc. (NYSE: GG, TSX: G) (Goldcorp) today announced
that the government of Korea, through the Korea Fair Trade
Commission, issued a letter stating that the proposed combination
of the two companies is not in violation of Article 7 (1)
(Restriction on Business Combination) of the Monopoly Regulations
and Fair Trade Act, thereby clearing the previously announced
transaction to proceed.
Earlier this month, the Canadian Competition Bureau issued a “no
action” letter clearing the transaction under Canadian competition
law. Newmont and Goldcorp continue cooperating with other
regulatory agencies to secure the remaining approvals that are
conditions to closing.
“We continue making steady progress in securing the necessary
approvals to close our transaction with Goldcorp in the second
quarter as previously announced,” said Gary Goldberg, Newmont’s
Chief Executive Officer. “We also remain focused on systematically
advancing our plans to ensure a safe and smooth combination after
the shareholder votes in April. Once the transaction is complete,
Newmont Goldcorp will be the world’s leading gold company and
represent the best path to creating long-term value for our
shareholders and other stakeholders without exposing them to
unnecessary jurisdictional and other risks.”
The pending combination of Newmont and Goldcorp will feature an
unmatched portfolio of world-class operations, projects, Reserves,
exploration opportunities, and talent. On day one after the
transaction closes, expected in the second quarter, Newmont
Goldcorp will:
- Be immediately value-accretive to
Newmont’s Net Asset Value and cash flow per share;(1)
- Generate an estimated $75 per ounce in
Full Potential cost and efficiency improvements, representing
annual anticipated benefits of approximately $165 million per
year;(4)
- Create a combined $265 million in
expected annual pre-tax synergies and Full Potential benefits,
representing value creation potential of over $2.5 billion;(5)
- Target 6-7 million ounces of
steady-state gold production over a decades-long time
horizon;(1)
- Have the largest gold Reserves and
Resources in the gold sector, including on a per share basis;
- Be located in favorable mining
jurisdictions and prolific gold districts on four continents;
- Deliver the highest dividend among
senior gold producers;(2)
- Offer financial flexibility and an
investment-grade balance sheet to advance the most promising
projects generating a targeted Internal Rate of Return of at least
15 percent;(1)(3)
- Feature a deep bench of accomplished
business leaders and high-performing technical teams and other
talent with extensive mining industry experience; and
- Maintain industry leadership in
environmental, social and governance performance.
About Newmont
Newmont is a leading gold and copper producer. The Company’s
operations are primarily in the United States, Australia, Ghana,
Peru and Suriname. Newmont is the only gold producer listed in the
S&P 500 Index and was named the mining industry leader by the
Dow Jones Sustainability World Index in 2015, 2016, 2017 and 2018.
The Company is an industry leader in value creation, supported by
its leading technical, environmental, social and safety
performance. Newmont was founded in 1921 and has been publicly
traded since 1925.
About Goldcorp
Goldcorp is a senior gold producer focused on responsible mining
practices with safe, low-cost production from a high-quality
portfolio of mines.
Cautionary Statement Regarding Forward-Looking
Statements:
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbor created by such
sections and other applicable laws and “forward-looking
information” within the meaning of applicable Canadian securities
laws. Where a forward-looking statement expresses or implies an
expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business and financial performance and financial condition, and
often contain words such as “anticipate,” “intend,” “plan,” “will,”
“would,” “estimate,” “expect,” “believe,” “target,” “indicative,”
“preliminary,” or “potential.” Forward-looking statements in this
release may include, without limitation: (i) statements
relating to Newmont’s planned acquisition of Goldcorp (the
“proposed transaction”) and the expected terms, timing and closing
of the proposed transaction, including receipt of required
approvals and satisfaction of other customary closing conditions;
(ii) estimates of future production and sales, including
expected annual production range; (iii) estimates of future
costs applicable to sales and all-in sustaining costs;
(iv) expectations regarding accretion; (v) estimates of
future capital expenditures; (vi) estimates of future cost
reductions, efficiencies, value creation and synergies;
(vii) expectations regarding future exploration and the
development, growth and potential of Newmont’s and Goldcorp’s
operations, project pipeline and investments, including, without
limitation, project returns, expected average Internal Rate of
Return, schedule, decision dates, mine life, commercial start,
first production, capital average production, average costs and
upside potential; (viii) expectations regarding future
investments or divestitures; (ix) expectations of future dividends
and returns to shareholders; (x) expectations of future free
cash flow generation, liquidity, balance sheet strength and credit
ratings; (xi) expectations of future equity and enterprise
value; and (xii) expectations of future plans and benefits;
(xiii) expectations regarding future mineralization,
including, without limitation, expectations regarding reserves and
resources, grade and recoveries; and (xiv) estimates of future
closure costs and liabilities. Estimates or expectations of future
events or results are based upon certain assumptions, which may
prove to be incorrect. Such assumptions, include, but are not
limited to: (i) there being no significant change to current
geotechnical, metallurgical, hydrological and other physical
conditions; (ii) permitting, development, operations and expansion
of Newmont’s and Goldcorp’s operations and projects being
consistent with current expectations and mine plans, including
without limitation receipt of export approvals; (iii) political
developments in any jurisdiction in which Newmont and Goldcorp
operate being consistent with its current expectations; (iv)
certain exchange rate assumptions for the Australian dollar or the
Canadian dollar to the U.S. dollar, as well as other exchange rates
being approximately consistent with current levels; (v) certain
price assumptions for gold, copper, silver, zinc, lead and oil;
(vi) prices for key supplies being approximately consistent with
current levels; (vii) the accuracy of current mineral reserve,
mineral resource and mineralized material estimates; and (viii)
other planning assumptions. Risks relating to forward-looking
statements in regard to Newmont and Goldcorp’s business and future
performance may include, but are not limited to, gold and other
metals price volatility, currency fluctuations, operational risks,
increased production costs and variances in ore grade or recovery
rates from those assumed in mining plans, political risk, community
relations, conflict resolution governmental regulation and judicial
outcomes and other risks. In addition, material risks that could
cause actual results to differ from forward-looking statements
include: the inherent uncertainty associated with financial or
other projections; the prompt and effective integration of
Newmont’s and Goldcorp’s businesses and the ability to achieve the
anticipated synergies and value-creation contemplated by the
proposed transaction; the risk associated with Newmont’s and
Goldcorp’s ability to obtain the approval of the proposed
transaction by their shareholders required to consummate the
proposed transaction and the timing of the closing of the proposed
transaction, including the risk that the conditions to the
transaction are not satisfied on a timely basis or at all and the
failure of the transaction to close for any other reason; the risk
that a consent or authorization that may be required for the
proposed transaction is not obtained or is obtained subject to
conditions that are not anticipated; the outcome of any legal
proceedings that may be instituted against the parties and others
related to the arrangement agreement; unanticipated difficulties or
expenditures relating to the transaction, the response of business
partners and retention as a result of the announcement and pendency
of the transaction; potential volatility in the price of Newmont
common stock due to the proposed transaction; the anticipated size
of the markets and continued demand for Newmont’s and Goldcorp’s
resources and the impact of competitive responses to the
announcement of the transaction; and the diversion of management
time on transaction-related issues. For a more detailed discussion
of such risks and other factors, see Newmont’s 2018 Annual Report
on Form 10-K, filed with the Securities and Exchange Commission
(SEC) as well as the Company’s other SEC filings, available on the
SEC website or www.newmont.com, Goldcorp’s most recent annual
information form as well as Goldcorp’s other filings made with
Canadian securities regulatory authorities and available on SEDAR,
on the SEC website or www.goldcorp.com. Newmont is not affirming or
adopting any statements or reports attributed to Goldcorp
(including prior mineral reserve and resource declaration) in this
release or made by Goldcorp outside of this release. Goldcorp is
not affirming or adopting any statements or reports attributed to
Newmont (including prior mineral reserve and resource declaration)
in this release or made by Newmont outside of this release. Newmont
and Goldcorp do not undertake any obligation to release publicly
revisions to any “forward-looking statement,” including, without
limitation, outlook, to reflect events or circumstances after the
date of this release, or to reflect the occurrence of unanticipated
events, except as may be required under applicable securities laws.
Investors should not assume that any lack of update to a previously
issued “forward-looking statement” constitutes a reaffirmation of
that statement. Continued reliance on “forward-looking statements”
is at investors’ own risk.
Additional information about the proposed transaction and
where to find it
This release is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or
an invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. This release is
being made in respect of the proposed transaction involving the
Company and Goldcorp pursuant to the terms of an Arrangement
Agreement by and among the Company and Goldcorp and may be deemed
to be soliciting material relating to the proposed transaction. In
connection with the proposed transaction, the Company will file a
proxy statement relating to a special meeting of its stockholders
with the SEC. Additionally, the Company will file other relevant
materials in connection with the proposed transaction with the SEC.
Security holders of the Company are urged to read the proxy
statement regarding the proposed transaction and any other relevant
materials carefully in their entirety when they become available
before making any voting or investment decision with respect to the
proposed transaction because they will contain important
information about the proposed transaction and the parties to the
transaction. The definitive proxy statement will be mailed to the
Company’s stockholders. Stockholders of the Company will be able to
obtain a copy of the proxy statement, the filings with the SEC that
will be incorporated by reference into the proxy statement as well
as other filings containing information about the proposed
transaction and the parties to the transaction made by the Company
with the SEC free of charge at the SEC’s website at www.sec.gov, on
the Company’s website at
www.newmont.com/investor-relations/default.aspx or by contacting
the Company’s Investor Relations department at
jessica.largent@newmont.com or by calling 303-837-5484. Copies of
the documents filed with the SEC by Goldcorp will be available free
of charge at the SEC’s website at www.sec.gov.
Participants in the proposed transaction solicitation
The Company and its directors, its executive officers, members
of its management, its employees and other persons, under SEC
rules, may be deemed to be participants in the solicitation of
proxies of the Company’s stockholders in connection with the
proposed transaction. Investors and security holders may obtain
more detailed information regarding the names, affiliations and
interests of certain of the Company’s executive officers and
directors in the solicitation by reading the Company’s 2018 Annual
Report on Form 10-K filed with the SEC on February 21, 2019, its
proxy statement relating to its 2018 Annual Meeting of Stockholders
filed with the SEC on March 9, 2018 and other relevant materials
filed with the SEC when they become available. Additional
information regarding the interests of such potential participants
in the solicitation of proxies in connection with the proposed
transaction will be set forth in the proxy statement filed with the
SEC relating to the transaction when it becomes available.
Additional information concerning Goldcorp’s executive officers and
directors is set forth in its 2017 Annual Report on Form 40-F filed
with the SEC on March 23, 2018, its management information circular
relating to its 2018 Annual Meeting of Stockholders filed with the
SEC on March 16, 2018 and other relevant materials filed with the
SEC when they become available.
(1) Caution Regarding Projections: Projections used in this
release are considered “forward looking statements”. See cautionary
statement above regarding forward-looking statements.
Forward-looking information representing post-closing expectations
is inherently uncertain. Estimates such as expected accretion,
potential value creation, synergies, expected future production,
internal rate of return, financial flexibility and balance sheet
strength are preliminary in nature. There can be no assurance that
the proposed transaction will close or that the forward-looking
information will prove to be accurate. (2) 2019 dividends
beyond Q1 2019 have not yet been approved or declared by the Board
of Directors. Management’s expectations with respect to future
dividends or annualized dividends are “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws. Investors are
cautioned that such statements with respect to future dividends are
non-binding. The declaration and payment of future dividends remain
at the discretion of the Board of Directors and will be determined
based on Newmont’s financial results, balance sheet strength, cash
and liquidity requirements, future prospects, gold and commodity
prices, and other factors deemed relevant by the Board. The Board
of Directors reserves all powers related to the declaration and
payment of dividends. Consequently, in determining the dividend to
be declared and paid on the common stock of the Company, the Board
of Directors may revise or terminate the payment level at any time
without prior notice. As a result, investors should not place undue
reliance on such statements. (3) Internal rates of return
targets on projects, before taxes and royalties, are calculated
using an assumed $1,200 gold price. (4) Full Potential cost
savings or improvements as used in this release are considered
operating measures provided for illustrative purposes, and should
not be considered GAAP or non-GAAP financial measures. Full
Potential amounts are estimates utilized by management that
represent estimated cumulative incremental value realized as a
result of Full Potential projects implemented and are based upon
both cost savings and efficiencies that have been monetized for
purposes of the estimation. Because Full Potential
savings/improvements estimates reflect differences between certain
actual costs incurred and management estimates of costs that would
have been incurred in the absence of the Full Potential program,
such estimates are necessarily imprecise and are based on numerous
judgments and assumptions. Expected Full Potential cost savings or
improvements are projections are “forward-looking statements”
subject to risks, uncertainties and other factors which could cause
actual results to differ from current expectations. (5)
Value creation potential as used in this release is a management
estimate provided for illustrative purposes, and should not be
considered a GAAP or non-GAAP financial measure. Value creation
potential represents management’s estimate of cost savings and
improvements as the result of the Full Potential program and
synergies as a result of the proposed transaction that have been
monetized and projected over a twenty year period for purposes of
the estimation, applying a discount rate of 7 percent. Such
estimates are necessarily imprecise and are based on numerous
judgments and assumptions. Expected value creation potential is a
“forward-looking statement” subject to risks, uncertainties and
other factors which could cause actual value creation to differ
from expected value creation.
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version on businesswire.com: https://www.businesswire.com/news/home/20190226005916/en/
NewmontMedia ContactOmar
Jabara303.837.5114omar.jabara@newmont.comorInvestor ContactJessica
Largent303.837.5484jessica.largent@newmont.com
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