Barrick Gold buys Randgold to create world’s biggest gold miner

Barrick to buy Randgold for $18.3B forming giant global gold miner

The combined group, which will be listed in Toronto and NY, will have a diverse portfolio of assets containing some of the world's most profitable gold mines, including Cortez and Goldstrike in Nevada and the Kibali mine in the Democratic Republic of Congo. Mining companies have found themselves caught up in a wave of resource nationalism around the world, but the tide has been particularly strong in many parts of Africa, where politicians are threatening to upend long-standing agreements in order to reap greater economic rewards from local resources. Wells Fargo & Company MN now owns 540,220 shares of the basic materials company's stock worth $44,968,000 after acquiring an additional 3,597 shares during the period.

Under Executive Chairman John Thornton, Barrick has been selling assets and stakes in mines to reduce costs and debt. New Barrick is valued at 5.1 times 2017 Ebitda, against an average of 8.8 times for the other four miners.

The company's production is scheduled to decline this year from 5.3 million ounces of gold in 2017 to around 4.5 million ounces this year, which means it was set to relinquish its role as the world's largest gold producer to USA -based rival Newmont Mining Corp.

Investors will get 6.128 new Barrick shares for each Randgold share they hold. As the earnings per share (EPS) formula is stated as earnings available to common shareholders divided by number of common stock shares outstanding, therefore its diluted EPS is calculated to be 2.48 (ttm). Both sets of investors are expected to vote on the deal around November 5.

Thornton last month outlined Barrick's plan to add more top-quality mines and to gradually shed anything of a lower caliber or that's not deemed to be "strategic".

It is noted that the total capitalization after the merger will amount to about $18.3 billion. the company will have the maximum concentration of gold assets (tier 1 gold assets) in the industry.

Barrick Gold Corporation (ABX) belonging to the Basic Materials sector has declined -1.41% and closed its last trading session at $10.47. Randgold Chief Financial Officer Graham Shuttleworth will become CFO of the new company.

Both Barrick and Randgold have lost a third of their market capitalisations over the past year before Monday's gains.

Investec analyst Hunter Hillcoat told Bloomberg that Barrick will benefit from Bristow's limitless energy and fresh perspective.

Thornton will remain as executive chairman, directing strategy and Bristow will be president and chief executive of the merged company, running day-to-day operations. "All things considered, this transformational deal should be good for Barrick shareholders over the medium/long-term".

Randgold has operations in Mali, Senegal, the Democratic Republic of Congo and Ivory Coast.

The new Barrick company, which will be listed in NY and Toronto, will own five of the world's 10 lowest cost gold mines and will be valued at US$24 billion, including debt. "You know there has been many attempts to unlock value and as you know me, I'm agnostic about who owns it". Both firms are highly focused on production costs, aiming to build portfolios that generate free cash flow even if gold prices drop to as low as US$1,000 an ounce. 48,743,300 shares of the company's stock traded hands, compared to its average volume of 11,917,469.

Barrick was advised by Morgan Stanley and M. Klein and Company, while Randgold was advised by CIBC World Markets and Barclays.

Related news:

Hot News

isis-killer-beheading-video-story-top Magnificent Hazard ends Liverpool's 100 per cent start
Sep 27, 2018 - 02:16
Chelsea made a bright start to the Carabao Cup third-round clash at Anfield, where Alvaro Morata nearly gave them the lead. Liverpool host Chelsea in the Carabao Cup 3rd round today at Anfield.

isis-killer-beheading-video-story-top Versace to be bought by USA firm Michael Kors in $2bn deal
Sep 27, 2018 - 01:09
Michael Kors's sales in 2017 were $4.7 billion, up from less than $800 million in 2011 when the company went public. Last year , Michael Kors bought Jimmy Choo , the luxury shoemaker founded in London, for nearly £900m.

isis-killer-beheading-video-story-top Japan releases rovers towards asteroid
Sep 26, 2018 - 03:30
The spacecraft will leave Ryugu in December 2019 with the intention of returning to Earth with the asteroid samples in 2020. Color image captured by Rover-1A on September 22, 2018, while moving (during a hop) on the surface of asteroid Ryugu.

isis-killer-beheading-video-story-top Risk of severe thunderstorms this afternoon/evening across Chicago area
Sep 26, 2018 - 02:28
It will be breezy, too, with winds of 10 to 15 miles per hour and gusts as high as 30 miles per hour . These storms are also putting down a lot of rain and may cause additional flooding issues.

isis-killer-beheading-video-story-top Mourinho tells Manchester United squad Paul Pogba will never captain club again
Sep 26, 2018 - 01:59
Mourinho said on Sky Sports shortly before kick-off that Pogba and others had been "rested" for the Derby game. "That's Old Trafford", Pogba told reporters.

isis-killer-beheading-video-story-top The China-US Trade War Might Go Beyond Tariffs Soon
Sep 26, 2018 - 01:58
It affirmed China's stance that it is a developing country, a claim that rankles Washington , Europe and other trading partners. His latest attack means that the U.S. is collecting import levies on $250 billion of Chinese goods.

isis-killer-beheading-video-story-top Brett Kavanaugh Denies Fresh Harassment Allegations From College Classmate
Sep 26, 2018 - 01:29
California professor Christine Blasey Ford has accused Kavanaugh of sexual assault at a high school party more than 35 years ago. Kavanaugh: "The truth is I've never sexually assaulted anyone, in high school or otherwise".

isis-killer-beheading-video-story-top Meghan steps out without Prince Harry for first royal solo engagement
Sep 26, 2018 - 00:32
Meghan Markle's estranged sister is on her way to the United Kingdom for "showdown talks" over dad Thomas Markle' health. The Oceania exhibition at the Royal Academy of Arts will open to the public from 29 September to 10 December.

isis-killer-beheading-video-story-top Serena Williams slams 'hearsay' Maria Sharapova book ahead of French Open clash
Sep 25, 2018 - 01:38
SERENA Williams has opened up on her chaotic US Open final in an interview with The Project's Lisa Wilkinson. That resulted in a second violation, meaning Osaka was awarded the first point of the sixth game.

isis-killer-beheading-video-story-top Petr Cech: Arsene Wenger put style above winning at Arsenal
Sep 25, 2018 - 01:35
When asked what the team lacked in the past he said: "The Arsenal way was more important than getting the points sometimes". The first half performance was woeful at times but the Gunners stayed in the game and got the goals when they needed to.

isis-killer-beheading-video-story-top Trump defends court nominee as Republican press for confirmation
Sep 25, 2018 - 01:23
Avenatti tweeted on Sunday evening that: "I represent a woman with credible information regarding Judge Kavanaugh and Mark Judge". Vice President Mike Pence calls Supreme Court nominee Brett Kavanaugh "a man of integrity with impeccable credentials".

Kavanaugh accuser Ford agrees to testify Thursday; 2nd accuser steps forward
Sep 25, 2018 - 01:12
The women making the allegations, Trump said, "were coming out of the woodwork and, he said, "in my opinion totally political". Hatch, a member of the judiciary committee, said again in his statement "every accuser deserves to be heard".

isis-killer-beheading-video-story-top Ronaldo and Messi to sit on panel of new Ballon d’Or award
Sep 25, 2018 - 01:10
This is the third edition of the Best Fifa Football Awards, set up after Fifa ended its association with the Ballon d'Or award. She led Brazil to the Copa America in April, as they won all seven matches - although she only scored one of their 31 goals.

isis-killer-beheading-video-story-top Navy commander Abhilash Tomy rescued, in conscious state
Sep 25, 2018 - 01:07
He is in the south Indian Ocean, approximately 1900 nautical miles WSW from Perth, Australia and about 2700 nm from Cape Comorin. The rescue team shifted Tomy from his indigenous vessel, S V Thuriya to the Osiris on a stretcher using their Gemini boat.

isis-killer-beheading-video-story-top Patriots vs Lions: Rob Gronkowski "Not Going Anywhere Without Brady"
Sep 24, 2018 - 18:34
Perhaps he doesn't save the team, but he certainly extends their offense to another level in two weeks' time. Rob Gronkowski with the Lions? Gronkowski even declined to return the Lions' calls, according to sources.