Shareholders approve Newmont Goldcorp merger

Shareholders for Newmont, Goldcorp approve merger to form largest gold miner

Ian Telfer, who was to be appointed deputy chairman of the new company, recently announced he will not be accepting the appointment.

(This story has been updated with a correction. Ian Telfer, who was to be appointed deputy chairman of Newmont Goldcorp, has decided not to accept the position.)

Shareholders for both Goldcorp (NYSE:GG; TSX:G) and Newmont Mining Corp. (NYSE:NEM) have approved a $10 billion mega-merger that will see Newmont Goldcorp become the world’s largest gold mining company.

Thursday, April 12, Newmont shareholders overwhelmingly approved the deal. Earlier, on April 4, Goldcorp shareholders also approved the merger.

Stock for Goldcorp and Newmont barely budged on Thursday’s announcement, suggesting the market considered the approval of the merger a foregone conclusion.

Currently Barrick Gold Corp. (TSX:ABX) is the world’ largest gold mining company. Newmont Goldcorp will now hold that distinction, with a combined market cap of about $32 billion.

Barrick tried an end-run on the merger, when it made a hostile takeover bid for Newmont, which was soundly rejected by Newmont shareholders in March. Barrick and Newmont ended up striking a separate deal, in which they agreed to enter a new joint venture that will combine their respective mines and talent in Nevada.

Newmont’s headquarters will remain in Colorado, while Goldcorp’s Vancouver headquarters office, which employs 160 people, will become Newmont’s regional office for North American operations.

The new company will have a switch-up in executives June 1. It appears most Goldcorp executives will be cut loose, as the new lineup appears to be mostly Newmont executives.

Goldcorp chairman Ian Telfer, who was originally to be named deputy chairmen of the new company, has decided not to accept the position. He is retiring, instead. Goldcorp's board of directors have been criticized for authorizing an increase to Telfer's retirement allowance to US$12 million.

An executive change-up on June 1 will see Newmont executives assuming new roles.

Newmont CEO Gary Goldberg is retiring and will be replaced as CEO by Newmont’s chief operating officer, Tom Palmer.

Newmont confirmed it is looking at $1 billion to $1.5 billion in divestitures post-merger, but that could include both Goldcorp and Newmont assets.

There could be short-term losses for Vancouver, but a long-term gain for its junior mining sector, Rick Rule, president of Sprott U.S. Holdings, told Business in Vancouver last month.

Rule said large mergers are ultimately good for the junior mining sector, because they can pick up good assets and talent.

“In Vancouver I see this great surge in mergers as being hugely beneficial for the juniors,” he said. “I see these people having the ability to lavish extra care and attention on properties that, while they’re not top-tier properties, could really benefit some of the more efficient Vancouver juniors.”

nbennett@biv.com

@nbennett_biv