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Barrick Gold Proposes Merger With Newmont Mining

Barrick Gold Corp. (ABX.TO) said Monday that it has made a proposal to the Newmont Mining Corporation (NEM) Board of Directors to merge with Newmont in an all-share transaction.

Barrick President and CEO Mark Bristow said the proposed merger is expected to unlock more than US$7 billion net present value (pre-tax) of real synergies, a major portion of which is generated by combining the two companies' assets in Nevada, including Barrick's significant mineral endowments and Newmont's processing plants and infrastructure.

The Barrick proposal to Newmont is for a merger in which each Newmont shareholder would receive 2.5694 Barrick shares per Newmont share, representing an at-market transaction based on the volume-weighted average trading prices of the shares of Barrick and Newmont on the New York Stock Exchange over the 20 trading days ended February 20, 2019, being the last trading day before the day on which news of this transaction was broadly leaked through the financial press.

Barrick shareholders would own approximately 55.9 percent of the merged company and Newmont shareholders would own approximately 44.1 percent.

The combined company intends to match Newmont's annual dividend of US$0.56 per share which, based on the proposed exchange ratio, will represent a pro forma annual dividend of US$0.22 per Barrick share.

Barrick said its proposal constitutes a significantly superior alternative to Newmont's previously announced agreement to acquire Goldcorp. In addition to the strategic benefits of the proposal, the combination of Barrick and Newmont would be materially more accretive on all key financial metrics for Newmont shareholders than Newmont's proposed acquisition of Goldcorp, including NAV per share and cash flow per share accretion estimated to be approximately 14 percent and 9 percent, respectively.

on Sunday, Newmont Mining announced that it received from a subsidiary of Barrick Gold notice of intent to make two shareholder proposals for consideration at Newmont's next annual meeting of stockholders. The proposals, if made, would be to amend Newmont's by-laws to lower the share ownership threshold necessary to requisition shareholder meetings to 15 percent from the current 25 percent, and to repeal all by-law amendments implemented since October 24, 2018.

The notice followed Barrick's announcement on February 22, 2019, the same date as the delivery of the notice of intent, that it has reviewed the opportunity for an unsolicited, no premium merger with Newmont but has not made any decision. Newmont said it did not intend to speculate about Barrick's motivations or intentions and reserves all rights with respect to the shareholder proposals.

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