Newmont acquiring Goldcorp: The stars are aligning for a successful 2019

The Alain Review:Portfolio Manager and Head of Mining from Finance SA Alain Corbani takes a look at the latest news from the commodities market. Follow Alain’s series HERE.
Natural Gold Nuggets and Dust - California, United StatesBarrick 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.


Alain Corbani
Head of Mining & Manager of the Global Gold and Precious Fund
Finance SA, Paris, France


MiningIR.com hosts a variety of articles from a range of sources, our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.

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