Barrick Mining (TSX: ABX) has cleared the last significant obstacle standing between it and a spinout of its North American gold assets, striking a deal with Newmont (NYSE: NEM) that ends a months-long standoff over the Nevada joint venture the two companies share.
Newmont has given its consent to Barrick’s proposed initial public offering of the North American business, the companies said Monday. That consent was the piece Barrick needed. Newmont had argued that a right of first refusal tied to Nevada Gold Mines gave it a say over any such transaction, leaving the spinout in limbo while the two sides argued.
Under the agreement, the so-called excluded properties, assets each partner had kept outside the joint venture, will now be contributed into Nevada Gold Mines. Barrick puts in Fourmile, the wholly owned development that sits at the center of the dispute. Newmont contributes Fiberline and Mike. Newmont will pay Barrick $1.95 billion to reflect the value of what is moving in.
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The deal also concludes all outstanding disputes between the partners related to the venture, and installs what the companies describe as enhanced governance provisions under a modernized joint venture agreement. Specific terms of those governance changes were not disclosed.
The backdrop is a relationship that had turned openly adversarial. On Feb. 3, Newmont served Barrick with a notice of default under the joint venture agreement, alleging mismanagement and, pointedly, that Barrick had been diverting Nevada Gold Mines resources toward Fourmile, an asset Barrick alone owned at the time. Newmont Chief Executive Officer Natascha Viljoen confirmed the filing but pointed to confidentiality provisions in declining to elaborate.
Since the venture was formed in July 2019, Barrick has held 61.5%, three of five board seats and operator status. Newmont has held 38.5% and two seats, dependent on a competitor to run assets it partly owns.
Barrick said separately this morning that the spinout of its North American assets remains on track for completion by year end, with current Barrick Mining CEO Mark Hill to take on the leadership position at the spinout.
Barrick Mining last traded at $60.96 on the TSX.
