The Financial Post reports in its Saturday edition that Barrick and Newmont are celebrating their joint venture in Nevada, but some analysts and investors question the much-ballyhooed cost savings of $500-million (U.S.) a year.
The Post's Gabriel Friedman writes that many in the industry are also questioning what will happen after a two-year standstill agreement between the two companies that prevents hostile bids expires, and the rivalry resumes. By then, Newmont's current chief executive officer will be gone. Newmont poured its first gold bar in the Carlin trend in 1964;
Barrick arrived in the area in 1986, but derives 45 per cent of its gold from the area and is in the process of defining new deposits that will extend its production there. Many experts, including senior Newmont officials, have wondered over the years why the two companies have never co-operated to streamline operations in the state. Many analysts have speculated that Barrick's Mark Bristow never believed the no-premium bid would succeed, and at least one analyst thinks that was the plan all along. "Maybe the no-premium offer was a way to get the Newmont guys to wet their pants and do the Nevada JV," said John Tumazos at Very Independent Research.
© 2024 Canjex Publishing Ltd. All rights reserved.