[ad_1]
According to reports, Barrick Gold of Canada is in talks to merge with its London-listed rival Randgold Resources in an $ 18 billion deal that would create the world's largest gold producer.
The talks between Barrick and Randgold follow a dismal year for the sector, which has struggled to catch the attention of investors.
Barrick shares fell by 25% due to criticism of its strategy, while Randgold dropped 34% due to a number of operational issues, including a strike at one of its largest mines .
This is the worst performance of the gold price, which has fallen more than 9% since the beginning of the year to reach $ 1,199 per troy ounce, affected by the strengthening of the US dollar.
IKN, a blog specializing in the mining industry, first announced the announcement of negotiations between Randgold and Barrick, saying an announcement could be made Sunday or before the start of negotiations Monday. Bloomberg later said the two companies were in advanced discussion.
Barrick did not respond to calls requesting comments. Randgold declined to comment.
Barrick is headed by John Thornton, a former Goldman Sachs banker. Since he was named executive chairman of the board in 2014, the Toronto-based group has sold assets and focused on cash flow rather than expanding its reserves. 39; gold.
But its production has also fallen, threatening its position as the world's largest gold producer, it could lose against his Canadian rival Newmont Resources.
Buying Randgold, which is headed by a pugnacious South African Mark Bristow, would be one way to address these concerns and buy one of the world's most highly regarded gold mines.
In a recent interview with the Canadian daily Globe and Mail, Thornton said he admired Randgold and wanted to replicate his "superior returns". Barrick has a market value of just over $ 12 billion, double that of Randgold.
A rapprochement with Randgold would also expand Barrick's footprint in Africa, a region that has been a source of hardship for society in the past two years.
advisable
Barrick is currently negotiating with the Tanzanian president to end a confrontation with Acacia Mining, in which it holds a majority stake, which has not been able to export since April 2017.
Mr. Thornton ruffled Acacia feathers after deciding to negotiate directly with Tanzanian President John Magafuli, without informing Acacia.
Founded in 1995 by Mr. Bristow, Randgold is one of the most respected gold companies and is renowned for its ability to operate in some of the most challenging countries in the region.
Randgold operates five mines in three mainland countries: Mali, Côte d'Ivoire and the Democratic Republic of Congo, where the government has introduced a controversial new mining code. It aims to produce 1.3 to 1.35 million ounces of gold this year.
Gold has suffered this year from the continued strength of the US dollar, making gold more expensive for foreign buyers.
US interest rates have risen steadily since January, and with a 3-month Treasury yield of about 2.15%, gold holdings have become less attractive as the metal is not profitable.
Source link
