Merger talks between Barrick Gold Corp, Newmont Mining Corp. stall, but interest remains high

TORONTO — Talks about a potential merger of Barrick Gold Corp. and Newmont Mining Corp., predicated on savings in an overlap in Nevada gold mining operations, have hit a roadblock, but sources close to the situation say the companies remain interested in reaching a deal.

The talks had been on for a few weeks, and the two sides had broadly agreed to a transaction under which Toronto-based Barrick would acquire Denver-based Newmont in an all-stock deal, one source close to the matter said.

Analysts and some investors have thought a deal, particularly involving their major operations in Nevada, was logical from a cost-cutting perspective.

Both Barrick and Newmont operate on five continents and have a combined market value of about $33 billion. Before talks broke off Friday, the companies had agreed to an all-stock merger in which Barrick was to offer Newmont shareholders a premium of 13 percent more than Newmont’s average share price over the latest 20 trading days, one of the people with knowledge of the situation told Bloomberg News.

Other sources, who asked not to be named because of the sensitive nature of the situation, said the talks have stalled over the issue of the spin-out of some assets from the combined entity, which is among the hurdles to a deal.

Barrick and Newmont declined to comment on the matter.

Sources said the two companies had hoped to complete a deal this month ahead of the annual shareholder meetings of both companies, but that timetable was now looking unlikely.

Newmont’s annual general meeting is set for Wednesday. Barrick’s is being held April 30.

Most of the cost savings would come from Nevada, where Barrick and Newmont both produce more than a third of their gold. They operate in proximity in the state, from which they originally built out their respective businesses, Bloomberg News reported.