The world’s two largest gold producers, Barrick Gold Corp. and Newmont Mining Corp. are still interested in merging, a person familiar with the matter said.
The North American-based gold companies had hoped to finalize a deal before Newmont’s annual meeting of shareholders, scheduled for Wednesday April 23, sources familiar with the matter said.
But talks broke down late last week. The Wall Street Journal first reported the news of the breakdown.
Nevertheless, the companies are still open to merger discussions, said one source.
The negotiations come amid a deep slump in the gold industry. The price of the precious metal lost nearly 30 per cent last year, once falling below $1,200 an ounce. It recovered slightly at the beginning of this year but is now trading below $1,300 an ounce.
Barrick, the world’s biggest gold producer, and Newmont, the world’s no. 2, have had to cut costs to deal with lower bullion prices.
Throughout the years, the companies have talked about joining forces in Nevada, where they have both operated for decades.
But plans to merge never came to fruition.
The miners already jointly own the Turquoise Ridge mine in Nevada and have some neighbouring operations in the state. A merged Barrick-Newmont could save millions by combining more of their Nevada operations, analysts have said.
Toronto-based Barrick owns six mines in the state, including its most prolific mine Goldstrike. Colorado-headquartered Newmont owns 18 mines there.
Their last serious merger discussion was after Barrick bought Placer Dome Inc. in 2006. But that fell apart when Newmont wanted to move Barrick’s Toronto headquarters.
Spokesmen for Barrick and Newmont declined comment.