Barrick Gold Corp. acquiring Randgold Resources Ltd. in September 2018. Today Newmont Mining Corp. announcing its intention to acquire Goldcorp Inc. to become the top gold miner with a market capitalization of US$26 billion.
The deal announced means Newmont will exchange 0.328 of a share and two cents in cash for each of Goldcorp’s outstanding common shares. This equates to $11.46 per share, giving a premium of approximately 18% on Goldcorp’s closing price on Friday on the New York Stock Exchange.
If and when the latter merger closes the two newcos will weigh 34% of the FTSE Gold Mines Index while gold is trading south of a single point from its golden cross sitting at US$1248.
This is NOT a coincidence. Of course, bigger is not better but this is not the point. A more dovish Federal Reserve along with inflation anchored in the economical landscape should cement the favorable conditions to lift the price of gold. The stars are aligned for a successful year in 2019.