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Barrick Completes Merger with Homestake

TORONTO--(BUSINESS WIRE)--Dec. 14, 2001-- Barrick Gold Corporation (NYSE:ABX TSE:ABX. PARIS:ABX.) (SWISS:ABX.) (LSE:ABX.) today announced the completion of its merger with Homestake Mining Company (NYSE: HM), strengthening Barrick's leadership position as the most valuable gold mining company by market capitalization. ``Going forward, our goal is to be the most profitable, lowest-cost producer, not to be the biggest producer,'' said Randall Oliphant, Barrick's President and Chief Executive Officer.

Homestake shareholders strongly approved the merger during a special meeting held earlier today. Under the terms of the merger agreement, each share of Homestake common stock was converted into 0.53 Barrick common shares. The combined Company has approximately 536 million shares outstanding. Former holders of Homestake common stock now own approximately 26% of the outstanding Barrick common shares.

``This merger ties strength to strength,'' said Mr. Oliphant, ``creating a company with a stronger balance sheet, stronger free cash flows and more opportunities than either company had alone.'' Jack Thompson, Homestake's Chairman and C.E.O., said: ``We are pleased that our shareholders have shown overwhelming support for the merger, which uniquely positions the combined Company for an exciting and dynamic future.''

The transaction creates the clear market leader in four key areas:

-- Operating strength - provided by a large, low-cost asset base with the lowest geo-political risk profile among senior producers in the gold industry (54% of the merged Company's reserves are in North America and Australia, with another 33% in South America);

-- Financial strength - the industry's highest cash flows, only A-rated balance sheet and Premium Gold Sales Program, which has a 14-year track record of earning a premium to the spot price;

-- Capital markets strength - the largest market capitalization, roughly by a factor of two, with liquidity that is expected to place the combined Company in the top 100 of the S&P 500; and

-- A strong growth profile - with dominant land positions in the most prolific gold-producing regions in the world and a promising pipeline of new projects.

The Company has streamlined its management structure and appointed Homestake executives to the team. Barrick has appointed Jack Thompson as Vice Chairman of the Company and as a member of its Board of Directors. In addition, Homestake's Steve Orr has been appointed as Vice President, North American Operations, and Greg Lang as Vice President, Australian Operations. ``This new team structure has three key drivers: profitable growth, operational excellence and leadership development,'' said Mr. Oliphant. The Company's corporate offices will continue to be located in Toronto.

When the transaction was announced June 25, Barrick projected administrative and financial synergies of at least $55 million annually beginning in 2002, comprised of approximately $20 million in tax savings, $20 million in administrative expense savings, and $15 million as a result of exploration expense savings and the benefits of combining complementary operations. ``Based on the work done to date, the Company now expects to realize approximately $60 million next year, which we see as a base to build on for 2003,'' said Mr. Oliphant.

Over and above these synergies, an integration team made up of two dozen people, half Barrick and half Homestake, has been focusing on operating savings at each of the mining operations. Another integration team, focused on development projects, is assessing the Pascua and Veladero properties in Chile and Argentina as an opportunity for future growth. The focus is on developing Pascua and Veladero as a single, unified gold district, with the benefits that provides in the form of lower capital and operating costs. The primary objective for 2002 will be to finalize the development plan for the Veladero Property.

Post-merger, Barrick's Premium Gold Sales Program will continue to provide security during periods of low gold prices while maintaining flexibility to participate in higher spot prices. With the inclusion of Homestake's hedge position, the Program is very much in line with its historic parameters. The Program had 18.3 million ounces in spot deferred contracts at average price of $345 an ounce at the end of the third quarter this year. The Program is expected to generate approximately $200 million annually in premiums for the Company, continuing a 14-year track record in which the Program has earned an additional $2 billion in revenue, or an average $68 per ounce premium to the spot price. Going forward, a portion of Barrick's annual production is expected to be sold into the spot market. This will provide additional participation in a rising gold price environment while the Program continues to assure strong cash flows.

The combined Company now has a reserve base of 84.3 million ounces(1) and is expected to produce approximately 5.7 million ounces of gold at a cash cost of about $165 per ounce in 2002. Barrick trades under the ticker symbol ABX on the Toronto, New York, London and Swiss Stock Exchanges and the Paris Bourse.

Certain statements included herein, including those regarding, market capitalization, production, cash costs, cash flows, costs synergies and liquidity, constitute ``forward looking statements'' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Barrick or of the gold mining industry to be materially different from future results, performance or achievements expressed or implied by those forward looking statements. These risks, uncertainties and other factors include, but are not limited to, changes in the worldwide price of gold or certain other commodities and currencies and the risks involved in the exploration, development and mining business. These factors are discussed in greater detail in Barrick's most recent Annual Information Form and ``Management's Discussion and Analysis of Financial and Operating Results'' on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.

  • (1) Calculated in accordance with the standards set out in National Instrument 43-101, as required by Canadian securities regulatory authorities, which are different than the standards set out in U.S. Industry Guide 7 (under the Securities Act of 1934).


         Barrick Gold Corporation
         Vincent Borg, 416/307-7477
         416/861-1509 (FAX)

  • Categories: Press Releases


    This web page contains documents relating to the proposed acquisition by Barrick Gold Corporation (“Barrick”) of Newmont Mining Corporation (“Newmont”). By accessing this website, you acknowledge the following:

    Additional Information and Where to Find It

    Barrick may file a registration statement on Form F-4 containing a prospectus of Barrick with the Securities and Exchange Commission (the “SEC”) in connection with the proposed transaction or a proxy statement (the “Barrick Proxy”) in connection with Newmont’s special meeting of stockholders. Any definitive proxy statement or final prospectus will be sent to the stockholders of Newmont. Investors and security holders are urged to read the Barrick Proxy, the prospectus and any other relevant document filed with the SEC when they become available, because they will contain important information about Barrick, Newmont and the proposed transaction. The Barrick Proxy, the prospectus and other documents relating to the proposed transaction (if and when they become available) can be obtained free of charge from the SEC’s website at These documents (if and when they become available) can also be obtained free of charge from Barrick by directing a request to Barrick Investor Relations: +1 416 861-9911, toll free (North America) at 1-800-720-7415 and 161 Bay Street, Suite 3700, Toronto, Ontario M5J 2S1, Canada.

    Participants in Solicitation

    This communication is a not a solicitation of a proxy from any investor or securityholder. However, Barrick and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from Newmont stockholders in connection with Newmont’s special meeting of stockholders under the rules of the SEC. Certain information about the directors and executive officers of Barrick may be found in its 2017 Annual Report on Form 40-F filed with the SEC on March 26, 2018. Additional information regarding the interests of these participants will also be included in the proxy statement and the prospectus regarding the proposed transaction if and when they become available. These documents can be obtained free of charge from the sources indicated above.


    This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

    Forward-Looking Statements

    This web page and the documents contained herein contain statements which are, or may be deemed to be, “forward-looking statements” (or “forward-looking information”), under applicable securities laws including for the purposes of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Barrick about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in these communications include statements relating to (i) Barrick’s proposal to merge with Newmont in an all-share transaction, (ii) the expected impact of such a transaction on Barrick and Newmont, including the potential for real pre-tax synergies (and the net present value of any such synergies) as well as effects on and, as applicable, estimates of, Barrick’s portfolio of Tier One gold assets, NAV per share, revenues, Adjusted EBITDA, reserves and resources, market capitalization, trading liquidity, cash flow per share and free cash flow, (iii) Nevada’s position as the most prospective gold region, (iv) creation of the industry’s best gold investment vehicle, and Barrick’s ability to attract gold, generalist and yield-seeking investors, (v) opportunities for employees and other stakeholders, (vi) potential optimization of Barrick’s asset portfolio and the use of proceeds from any rationalization, (vii) the expected timing and scope of such a transaction, including timing and receipt of necessary regulatory approvals and satisfaction of conditions, (viii) Barrick’s future dividend payments or policies, and (ix) other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as “plans”, “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved.

    Although Barrick believes that the expectations reflected in such forward-looking statements are reasonable, Barrick can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include: risks relating to Newmont’s response to Barrick’s proposal and Barrick’s ability to engage with Newmont and its board of directors; Barrick and Newmont’s respective credit ratings; local and global political and economic conditions; Barrick’s economic model; liquidity risks; fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); financial services risk; the risks associated with each of Barrick and Newmont’s brand, reputation and trust; environmental risks; safety and technology risks; the ability to realise the anticipated benefits of the proposed transaction or implementing the business plan for Barrick following such transaction, should it occur, including as a result of a delay in its completion or difficulty in integrating the businesses of the companies involved; risks relating to the ultimate outcome of any possible transaction between Barrick and Newmont, including the possibilities that Newmont will reject a transaction with Barrick or that Barrick will not pursue a transaction with Newmont, the risk that the conditions to completion of the transaction will not be satisfied; the risk that any shareholder approval of the transaction will not be obtained from the relevant shareholders; the risk that required regulatory approvals necessary to complete the transaction will not be obtained, or that conditions will be imposed in connection with such approvals that will increase the costs associated with the transaction or have other negative implications for Barrick following the transaction; the risk that litigation relating to the transaction may be commenced which may prevent, delay or give rise to significant costs or liabilities on the part of Barrick or Newmont; the risk that the focus of management’s time and attention on the transaction may detract from other aspects of the respective businesses of Barrick and Newmont; the risk that a material decrease in the trading price of Barrick common shares may occur; the risk that Barrick may not be able to retain key employees of Newmont following the transaction; the risk that the benefits from the potential transaction (including estimated synergies and savings, years of profitable production in Nevada, premium values and value creation for Newmont and Barrick shareholders and financial benefits from the potential transaction) may not be achieved or, if achieved, will not be achieved on the scale anticipated; changes in or enforcement of national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States and other jurisdictions in which Barrick and Newmont carry on business or in which Barrick may carry on business in the future; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law; legal or regulatory developments and changes; the outcome of any litigation, arbitration or other dispute proceeding; the impact of any acquisitions or similar transactions; competition and market risks; the impact of foreign exchange rates; pricing pressures; the possibility that future exploration results will not be consistent with expectations; risks that exploration data may be incomplete and considerable additional work may be required to complete further evaluation, including but not limited to drilling, engineering and socioeconomic studies and investment; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; and business continuity and crisis management. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

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