Tag Archives: M&A

More major gold M&A as Newmont agrees to buy Goldcorp for $10 billion

Newmont Mining has agreed to acquire Goldcorp in a friendly all-stock deal valuing the Canada-headquartered company at $10 billion.

Under the terms of the agreement, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

The deal comes just weeks after Barrick Gold merged with Randgold Resources to create a new industry giant.

“The agreement will combine two gold industry leaders into Newmont Goldcorp, to create an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector,” Newmont said.

“Newmont Goldcorp’s world-class portfolio will feature operating assets in favourable jurisdictions, an unparalleled project pipeline, and exploration potential in the most prospective gold districts around the globe. In addition to providing shareholders the largest gold Reserves per share, Newmont Goldcorp will offer the highest annual dividend among senior gold producers.”

Gary Goldberg, Newmont’s Chief Executive Officer, said: “We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of 6-7 Moz over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline.

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement programme.”

Newmont Goldcorp’s reserves and resources will represent the largest in the gold sector, located in favourable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75%, 15% and 10%, respectively.

Newmont Goldcorp will also prioritise project development by returns and risk, while targeting $1.0 to 1.5 billion in divestitures over the next two years to optimise gold production at a sustainable, steady-state level of 6-7 Moz annually.

Goldcorp’s President and Chief Executive Officer, David Garofalo, said: “Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production.”

Following the merger, Newmont Goldcorp’s management team will be appointed on a “best talent” basis, Newmont said, with Gary Goldberg as Chief Executive Officer and Tom Palmer as President and Chief Operating Officer.

As part of a planned and orderly leadership succession process, Goldberg and Newmont’s board have been engaged in discussions anticipating a CEO succession in early 2019. In October 2018, the company also announced Palmer’s promotion to President and Chief Operating Officer.

To ensure a smooth and successful combination, Goldberg has agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies. The company expects this process to be substantially completed in the December quarter of 2019, when Goldberg plans to retire and Palmer will become President and Chief Executive Officer.

The Board of Directors will be proportionally comprised of Newmont and Goldcorp Directors, with Noreen Doyle as Chair and Ian Telfer as Deputy Chair.

Goldcorp’s Vancouver, Canada, office will become Newmont Goldcorp’s North America regional office, while Newmont Goldcorp’s South America regional office will be in Miami, US, the Australia regional office will be in Perth, and the Africa regional office will be in Accra, Ghana. Newmont Goldcorp will be a Delaware corporation with its corporate headquarters in Colorado, US.

The Boards of Directors of both companies have unanimously approved the transaction, including in the case of Goldcorp, on the unanimous recommendation of a special committee of independent directors of Goldcorp.

The transaction is expected to close in the June quarter, but closing is subject to approval by the shareholders of both companies; regulatory approvals in a number of jurisdictions including the European Union, Canada, South Korea and Mexico; and other customary closing conditions.

Automation leader Emerson acquires GE’s Intelligent Platforms division

Emerson has agreed to acquire Intelligent Platforms, a division of General Electric, as it looks to expand its potential customer base in markets such as metals and mining.

“Intelligent Platforms’ programmable logic controller (PLC) technologies will enable Emerson, a leader in automation for process and industrial applications, to provide its customers broader control and management of their operations,” Emerson said.

“The acquisition expands opportunities for Emerson in machine control and discrete applications across process industries and target hybrid markets, such as metals and mining, life sciences, food and beverage and packaging.

“By interfacing Intelligent Platforms’ PLC technology with Emerson’s leading distributed control systems, customers will be able to connect ‘islands of automation’ within the plant to further enhance operational performance, safety and reliability,” the company said.

Both Emerson and Intelligent Platforms focus on leveraging automation technologies to drive digital transformation in their end markets. Intelligent Platforms recently developed new cloud-connected controllers and devices to enable smarter plants, a strong complement to Emerson’s focus on digital transformation and the Industrial Internet of Things through its Plantweb™ digital ecosystem, according to Emerson.

Emerson Chairman and Chief Executive Officer, David Farr said: “This is another important investment in our global portfolio of automation technologies, offering discrete and machine control capabilities that complement our process control expertise to provide better solutions to our customers.”

Intelligent Platforms is based in Charlottesville, Virginia, with approximately 650 employees worldwide. In 2017, it registered sales of $210 million.

Lal Karsanbhai, Executive President of Emerson Automation Solutions, said Intelligent Platforms brings a “solid product portfolio” to serve Emersons’ target markets, along with a significant installed base.

“We are extremely pleased to have this unique opportunity to add a recognised discrete control capability to our growing portfolio of products and software applications that help our customers operate more safely and efficiently.”

Should all go well, the acquisition will close in the first half of Emerson’s fiscal 2019 year.

Emerson’s Automation Solutions business helps process, hybrid, and discrete manufacturers maximise production, protect personnel and the environment while optimising energy and operating costs, Emerson said.

Late last year, Emerson pulled a $29 billion bid for Rockwell Automation after facing several rejections from the company. At that point, it said it would then pursue bolt-on acquisitions to increase its market share in the automation business.

And, in February this year, Emerson and AspenTech teamed up to deliver asset optimisation software solutions along with global automation technologies and operational consulting services.

MacLean Engineering boosts R&D efforts with former MTI test facility acquisition

Underground utility vehicle specialist MacLean Engineering has purchased the former MTI test facility in Sudbury, Ontario, and intends to use it as the company’s new innovation hub.

The facility on Magill Street, less than a 10-minute drive from the MacLean sales, service and support centre on Kelly Lake Road, includes an approximately 300 m underground ramp down to a depth of some 40 m, at an average grade of 15%.

The underground facility also includes an excavated cavern where shaft jumbo mucking training had previously been conducted, along with a 4,500 km² building on a three-hectare site footprint.

MacLean President Kevin MacLean said: “We intend to utilise this facility as an innovation hub for our company, just as Bob Lipic Sr did with MTI when the test facility was originally developed in 2012.

“I want our activities at site to honour the tradition of mining entrepreneurship that Bob embodied in the Sudbury mining industry.”

Stella Holloway, General Manager for MacLean’s Sudbury operations, said the access to an underground facility provides the company with a “research and development test bed for new products and new technologies, a mine-equivalent setting for conducting quality assurance/quality control checks on MacLean equipment prior to shipping, a place where employees and customers alike can be given hands-on exposure to our equipment in the working environment, as well as a great location for conducting photo and video shoots”.

The new facility will allow the company to “ramp up” its product development and testing efforts, according to MacLean Chairman and Founder Don MacLean.

“I started my mining career in the 1950s working underground at INCO (now part of Vale), this city is where the first MacLean branch was established back in 1995 and we now have 100 employees locally, so the Sudbury basin remains at the core of the MacLean business just as it remains at the heart of mining activity in Canada.”

MacLean is currently embarking on a full electrification of its fleet, a programme that is expected to be completed by the end of the year.

Certain assets of MTI, meanwhile, were sold to Joy Global (now Komatsu Mining) in 2014.

Amplats buys Glencore’s stake in SA platinum project

In another sign Anglo American Platinum is confident in the long-term fundamentals of the precious metal, it has agreed to purchase Glencore’s 39% interest in the Mototolo joint venture operation in the Bushveld of South Africa.

Amplats could pay up to R22 billion for the interest as part of a complex deal that involves an upfront cash payment of R0.8 billion on a “cash-free basis” and an additional consideration based on rand PGM prices over the life of mine.

This is Amplats’ second platinum group metal investment in as many weeks, with the company recently pledging $100 million towards two UK-based venture capital funds developing “innovative and competitive technological uses of PGMs”.

These developments come at a time when platinum prices remain subdued and many other companies, reliant on manual labour, are looking to scale back their exposure to the precious metals.

Amplats, on the other hand, is making money. In the first six months of the year, its EBITDA increased 70% year-on-year to R6.8 billion as it produced 4% more PGMs (2.58 million ounces ) and cut unit costs by 3%.

Mototolo is currently operated as a 50:50 JV between Amplats and a partnership of Glencore (39%) and Kagiso Tiso Holdings (11%). It produced 157,200 oz of PGMs in the first six months of the year, up 26% from the same period a year ago, due to higher built-up head grade and additional production rolled over from the second half of 2017.

Chris Griffith, Amplats CEO, said the increased interest in Mototolo, on the Eastern Limb of the Bushveld Complex, could lead to the company creating another major “PGM hub” that was, importantly, mechanised, low cost and had a high-quality resource.

Its Mogalakwena PGM hub on the northern side of the Bushveld Complex, another mechanised operation, is one of the most profitable operations within the group.

He also said the deal “unlocks significant optionality for the company in its wholly-owned Der Brochen resource”.

Der Brochen, 100% owned by Amplats, has 182.1 million tonnes of Merensky reef resources grading 4.37 g/t 4E PGE, plus 402.4 Mt of UG2 reef resources at 3.99 g/t 4E PGE.

The project has been within the Amplats portfolio for some time, but the company said combining the Mototolo JV area with the downdip and adjacent Der Brochen resource, could extend the current five-year life of mine to “well in excess” of 30 years. This is something the company is currently carrying out a study on.

The transaction is subject to a number of conditions, including competition commission approval, and is expected to complete in the December quarter of 2018.

De Beers to add Chidliak project to growing Canada diamond base

De Beers has signed a pact to acquire Vancouver-based junior Peregrine Diamonds as the major looks to expand its Canadian business with the addition of the Chidliak project in Nunavut.

The C$107 million deal has been unanimously recommended by Peregrine’s board of directors to Peregrine shareholders with some 44 % of investors already agreeing to vote ‘for’ the transaction.

The Chidliak resource was discovered in 2008 and is located around 120 km northeast of Iqaluit, Baffin Island. A total of 74 kimberlite pipes have been identified, including the CH-6 and CH-7 pipes, which are the current focus of Peregrine’s Chidliak phase one development programme. This programme has an inferred resource in excess of 22 million carats.

Peregrine’s recent Chidliak preliminary economic assessment pointed to the high quality of the CH-6 deposit, in particular, according to De Beers.

“An estimated grade of 2.41 carats per tonne and a diamond valuation of US$151 per carat (equating to approximately US$360 per tonne) make CH-6 one of the most attractive undeveloped diamond resources in Canada,” De Beers said.

Peregrine also has exploration properties in Nunavut and the Northwest Territories.

Bruce Cleaver, CEO of De Beers Group, said: “The Chidliak resource holds significant development potential and will be an exciting addition to our portfolio.”

A strong outlook for consumer demand is leading the company to look at opportunities to invest in its future supply potential and boost its Canada portfolio, he added.

Kim Truter, CEO of De Beers Canada, said: “With the transformation of our company in Canada over the past two years, our focused investment in new and innovative mining methods, and our expertise in Canada’s arctic environments, we believe we are very well positioned to now develop the resource further.”

De Beers already operates the Gahcho Kué diamond mine in the NWT, which started commerical production last year and is expected to produce 54 million carats of rough diamonds over its lifetime.

The company, also, in March, signed an agreement with Mountain Province Diamonds (MPD) to incorporate all of properties owned by Kennady Diamonds – and purchased by MPD via a takeover of Kennady –into the Gahcho Kué joint venture, currently owned 51:49 by De Beers and MPD.

Completion of the deal is expected in September, subject to several conditions.