NEW YORK: US gold miner Newmont Mining Corporation said in a statement on Monday it was buying Canadian rival Goldcorp Inc for $10 billion, creating the world’s largest gold mining company.

Colorado-based Newmont said it would buy all of Goldcorp’s outstanding common shares in a stock-for-stock transaction, acquiring each share for 0.3280 of a Newmont share, “which represents a 17pc premium based on the companies’ 20-day volume weighted average share prices,” a company statement read.

The industry has been consolidating as gold mines around the world get depleted, driving up costs and encouraging companies to come together in mergers and alliances.

The merged company, to be named Newmont Goldcorp, will produce some 7.9 million ounces of gold a year.

“This combination will create the world’s leading gold business with the best assets, people, prospects and value-creation opportunities,” said Newmont Chief Executive Officer Gary Goldberg.

The merger “creates the world’s premier gold company,” added Goldcorp President and Chief Executive Officer David Garofalo.

“Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production,” he said.

Goldberg, Newmont’s chief executive since 2013, will stay on as CEO until the merger is complete, likely in the last quarter of 2019. Then he will retire, and Chief Operating Officer Tom Palmer will take over, the company said.

Newmont Goldcorp also plans to sell up to $1.5 billion in assets over the next two years “to optimize gold production at a sustainable, steady-state level of six to seven million ounces annually,” the statement read.

Newmont also said it expects initial cost savings from the merger of $100 million a year.

The Newmont-Goldcorp deal comes three months after Barrick Gold Corp. agreed to buy Randgold Resources in a $5.4 billion deal.

Newmont Goldcorp’s shares will be traded on the New York Stock Exchange using the ticker symbol NEM, the statement added.

Published in Dawn, January 15th, 2019