Barrick's Spin-Off Plan Depends on Newmont's Approval

Newmont's Consent Crucial for Barrick's Restructuring

Canadian miner Barrick's plan to spin off its North American assets into a separate publicly traded company is contingent on approval from its joint venture partner, Newmont. Documents reveal that Newmont holds a right of first refusal on Barrick's stake in their shared Nevada Gold Mines NGM asset, giving it significant influence over the proposed initial public offering.

Overview of the Joint Venture

Barrick owns 61.5% of Nevada Gold Mines, while Denver-based Newmont holds the remaining 38.5%. The joint venture agreement stipulates that either party must offer its interest to the other before selling to a third party, and any transfer requires mutual consent. This arrangement marks a notable reversal of fortunes, as Barrick had previously attempted to acquire Newmont.

Impact on the Mining Market

The proposed IPO is one of the most anticipated mining events of 2026, with the new North America-focused entity valued at around $42 billion. Newmont's decision will directly impact Barrick's ability to restructure and unlock value for shareholders. Uncertainty surrounding the approval could affect market sentiment towards both companies, especially as investors closely watch the gold sector.

Summary

Ultimately, Barrick's strategic move to separate its North American operations from its global portfolio hinges on securing Newmont's cooperation. The outcome of these discussions will be a key factor for investors to monitor, with Barrick expected to provide more details during its upcoming earnings report.

FAQ

Q: Why does Barrick need Newmont's approval?
A: The joint venture agreement for Nevada Gold Mines gives Newmont the right of first refusal and veto power over any sale or transfer of Barrick's stake.

Q: What assets are included in the proposed spin-off?
A: The new entity would include the Nevada Gold Mines, the Pueblo Viejo mine in the Dominican Republic, and the underdeveloped Fourmile mine.

Source: Reuters via Investing.com