Press Release

Newmont board determines that Barrick's merger is not in Newmont shareholders' best interests

Bnamericas Published: Monday, March 04, 2019
Newmont board determines that Barrick's merger is not in Newmont shareholders' best interests

By Newmont Mining Corporation

DENVER--(BUSINESS WIRE)-- Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) today announced that its Board of Directors has unanimously determined that Barrick Gold Corporation's (Barrick) (NYSE: GOLD) (TSX: ABX) unsolicited, all-stock negative premium proposal to acquire Newmont is not in the best interests of Newmont's shareholders.

After a comprehensive review conducted in consultation with its financial and legal advisors, Newmont's Board unanimously concluded that Barrick's proposal does not constitute, and would not reasonably be expected to constitute, a Newmont Superior Proposal (as such term is defined in the arrangement agreement between Newmont and Goldcorp Inc. (NYSE: GG, TSX: G) (Goldcorp)). The Company's previously announced combination with Goldcorp represents a superior value creation opportunity to generate long-term value through an unmatched portfolio of world class operations, projects, exploration opportunities, reserves and talent.

"Our thorough review of Barrick's unsolicited proposal and its associated risks has reaffirmed our conclusion that the combination of Newmont and Goldcorp represents the best opportunity to create value for Newmont's shareholders and deliver industry-leading returns for decades to come," said Gary Goldberg, Newmont's Chief Executive Officer. "Unlike Barrick, Newmont Goldcorp will be centered in the world's most favorable mining jurisdictions and gold districts. The combination with Goldcorp is significantly more accretive to Newmont's shareholders on all relevant metrics compared to Barrick's proposal, even when factoring in Barrick's own synergy estimates. Realizing value through Barrick's proposal for Newmont's shareholders hinges entirely on a new management team that lacks global operating experience and is only two months into its own transformational integration."

Newmont Goldcorp Combination Represents Superior Value Creation Opportunity Over Barrick's Proposal

The Newmont Board of Directors' unanimous determination that the combination with Goldcorp represents a superior value creation opportunity over Barrick's unsolicited proposal is based on the following:

The Goldcorp transaction generates twice the accretion to Newmont's Net Asset Value (NAV) per share compared to Barrick's proposal, even when factoring in Barrick's unsubstantiated synergy assumptions.

Barrick's proposal is four percent (4%) dilutive to Newmont's NAV per share, before any synergies.i

The value creation claimed in Barrick's proposal relies entirely on the delivery of synergies from a management team that lacks global operating experience and is only two months into its integration effort with Randgold Resources Ltd.

Barrick's portfolio includes numerous unfavorable and high-risk jurisdictions with several ongoing and significant operational and sustainability problems.

By contrast, Newmont Goldcorp's assets will be located in favorable mining jurisdictions and prolific gold districts on four continents.

Completing the Newmont transaction with Goldcorp does not preclude Newmont or Barrick from achieving the available synergies in Nevada through a joint venture and may permit them to be realized sooner.

Because Newmont's Board determined that the Barrick proposal is not a "Newmont Superior Proposal" under the Goldcorp arrangement agreement, Newmont is prohibited under the provisions of that agreement from engaging with Barrick in relation to its proposal.

Proposed Nevada Joint Venture with Barrick

To realize the savings from Newmont's and Barrick's Nevada-related operations, Newmont today submitted a joint venture proposal to Barrick. The terms of the proposal are modeled on similar terms to other successful joint ventures, including ones that Barrick has with Newmont and Goldcorp.

Mr. Goldberg continued, "Newmont has consistently expressed to Barrick that we are open to a joint venture for our operations in Nevada. In that regard, today we have submitted a term sheet to Barrick proposing a Nevada joint venture. This proposal would enable both companies' shareholders to realize the available synergies while avoiding the significant risks and complexities associated with Barrick's unsolicited proposal."

Key terms of the joint venture proposal to combine the Nevada-related operations of Newmont Goldcorp and Barrick include:

Economic Interests: Barrick to hold an economic interest equal to 55 percent and Newmont Goldcorp to hold a 45 percent economic interest. The proposed economic interests are based upon analyst consensus Net Present Values for each company's Nevada-related assets and an equal split of Barrick's estimated Nevada synergies.

Governance: Newmont Goldcorp and Barrick will have an equal number of representatives on the Management and Technical Committees. Decisions by the Management Committee shall be determined by majority vote, with the voting power of the parties' representatives based on their respective economic interests, subject to a list of customary material matters requiring joint approval. The proposed joint venture's Operational Management will be jointly appointed by both parties and will be responsible for day-to-day operations.

"We are confident that Newmont's demonstrated technical expertise and consistent execution will be critical in realizing the synergy opportunities of the proposed joint venture," said Tom Palmer, Newmont's President and Chief Operating Officer.

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