Barrick Gold agrees to buy rival Randgold in all-share deal

24 Setiembre, 2018, 17:09 | Author: Arnold Perez
  • Barrick buys Randgold to create world's largest gold miner

However, they also announced the new company's shares would be traded in NY and Toronto, meaning Randgold's London listing on the FTSE 100 would be cancelled if the deal went ahead, as planned, early next year.

The price of gold has fallen more than 8% this year, putting all gold producers under pressure.

The deal will also give Barrick a much bigger presence in Africa, where Randgold has mines in Mali, Senegal, Côte d'Ivoire and the Democratic Republic of Congo.

Randgold chief executive, Mark Bristow, will remain in his role at the enlarged company. Thornton, a former Goldman Sachs Group Inc. executive, has discussed a need to import Silicon Valley technology to radically change the mining industry's approach, while Bristow has frequently criticized competitors.

"The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world's largest collection of Tier One gold assets", said Barrick Executive Chairman John Thornton.

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The new group will consider selling non-core assets over time.

The firms own some of the world's most valuable gold fields, producing more than 6.6 million ounces of gold a year.

Randgold shares were up 4.3 percent at 0901 GMT, making it the biggest gainer in London's wider mining index FTNMX1770.

"They also have high internal "hurdle" rates for investment; in Barrick's case they must generate an internal rate of return of 15% and in Randgold's 20%". The metal settled at US$1,200.04 on the spot market Friday. "Randgold has earned a 93% total return for shareholders in 10 years; Barrick, a 61% loss", it said. Newmont didn't immediately respond to an emailed request for comment outside usual office hours.

Speculation of a tie-up between the two companies comes as this year's Denver Gold Group conference, is about to kick into gear.



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