Gold miner Randgold unveils £13.7bn merger with Barrick

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Frequently he has excoriated the gold industry for failing to invest in exploration and has claimed that most of the gold coming out of the world's mines are extracted at a loss. The question is whether the whole will really be greater than the sum of its parts.

Canada's Barrick Gold has announced an $18.3bn deal to merge with UK-based Randgold Resources, creating a world-leading gold miner.

Both men said they share the same core values, including delivering value to shareholders, rather than focusing on the number of ounces of gold produced.

Thornton will retain his position in the enlarged company, while Bristow becomes president and CEO. Thornton, a former Goldman Sachs Group Inc. executive, has discussed a need to import Silicon Valley technology to radically change the mining industry's approach, while Bristow has frequently criticized competitors. While that effort was initially received well by investors, the move also has raised concern about the company's production pipeline, helping send its shares falling by about a half from a February 2017 peak. Randgold has also slipped this year as it faced labor challenges in the Ivory Coast, a tax dispute in Mali and the prospect of a tougher mining code in the Democratic Republic of Congo.

Randgold Resources' shareholders would hold the rest of the stock. Both sets of investors are expected to vote on the deal around November 5. The Toronto-based miner will also buy the equivalent amount of shares in Shandong Mining, a listed subsidiary of Shandong Gold, it said in a separate statement.

Thornton last month outlined Barrick's plan to add more top-quality mines and to gradually shed anything of a lower caliber or that's not deemed to be "strategic".

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Barrick said the New Barrick Group will have the highest adjusted EBITDA and adjusted EBITDA margin as well as the lowest total cash cost position among senior gold peers based on last year's results. In the case of Barrick Gold, the news proved to be positive. Blasutti noted that this deal should be advantageous to both parties, and gives Barrick the opportunity to sell non-core assets and make room on their balance sheet for bigger assets, which has been an objective for the company that has seen its share price drop almost 50% since 2016.

The new company - to be named Barrick Group - will have Bristow as its CEO which effectively brings the curtain down on more than two decades of Randgold in the role of industry maverick.

Barrick Gold has agreed to buy Randgold Resources for $6 billion in stock. "All things considered, this transformational deal should be good for Barrick shareholders over the medium/long-term".

Acacia Mining Plc, which is majority-owned by Barrick, has been stuck in limbo after Tanzania imposed a ban on exports of mineral concentrates in 2017 and slapped a $190 billion tax bill on the London-listed company. "You know there has been many attempts to unlock value and as you know me, I'm agnostic about who owns it".

Strategies of both companies are, supposedly, quite similar as both are heavily focused on production costs, looking to build portfolios that produce free cash flow even if prices of the metal drops to $1,000 per ounce. The metal traded at $1 203.94 at 10:51 a.m in NY.

While Barrick arguably paid up to buy Randgold, the benefits to the company from Randgold's management team, balance sheet and strong record should help Barrick as it navigates a hard industry and seeks to bolster investor confidence. Contributions of 200 words or more will be considered for publication.