In the latest deal in what’s becoming a wave of consolidation among gold miners, Newmont Mining announced on Monday that it would buy smaller miner Gold Corp in a deal valued at $10 billion.
The deal could create the largest gold miner in the world, with operations stretching from the Americas, to Australia and Ghana, the companies said. Newmont will offer 0.3280 of its share and two cents for each share of its Canadian rival, according to CNBC. The deal is the largest in the space since Randgold and Barrick announced their plans to merge back in September.
As the Wall Street Journal pointed out, the depletion of global gold mines and the resulting increase in extraction costs has pushed gold miners to seek cost efficiencies and smaller-scale combinations.
“The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels.” Goldcorp Chief Executive Officer David Garofalo said in a statement. Goldcorp shares climbed 1.3% in premarket trading on the news. The GDX, an ETF of gold miners, also climbed on the news.
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