Newmont Mining Corporation (NYSE: NEM) and Goldcorp Inc. (NYSE: GG, TSX: G) have announced they have entered into a definitive agreement in which Newmont will acquire all of the outstanding common shares of Goldcorp in a stock-for-stock transaction valued 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 percent premium based on the companies’ 20-day volume weighted average share prices.

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 Goldcorp’s world-class portfolio will feature operating assets in favorable 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.

“This combination will create the world’s leading gold business with the best assets, people, prospects and value-creation opportunities,” said Gary Goldberg, Newmont’s Chief Executive Officer.

“We have a proven strategy and disciplined implementation plan to realize the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces 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 program."

"The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share. We constantly review opportunities to raise our performance, and this combination represents the most promising path to deliver superior and sustainable value for our shareholders, employees, host countries and communities.”

Newmont Goldcorp’s Reserves and Resources will represent the largest in the gold sector and will be located in favorable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75 percent, 15 percent and 10 percent, respectively.

Newmont Goldcorp will also prioritize project development by returns and risk, while targeting $1.0 to 1.5 billion in divestitures over the next two years to optimize gold production at a sustainable, steady-state level of six to seven million ounces annually.

Supported by stable, profitable long-term production and an investment-grade balance sheet, Newmont Goldcorp will generate robust free cash flow and have the financial flexibility to fund project development and exploration in the decades ahead.

“This combination creates the world’s premier gold company,” said Goldcorp’s President and Chief Executive Officer, David Garofalo. “In addition to the depth and quality of Newmont Goldcorp’s operations, projects, exploration properties and Reserves, the combined company’s assets will be centered in the world’s most favorable and prospective mining jurisdictions and gold districts. The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction’s value proposition for all of our stakeholders. 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.”

Strategic rationale

The combination of Newmont and Goldcorp will create the world’s leading gold company offering shareholders and other stakeholders:

• Experienced management and talented mining professionals with a proven track record of maximizing value by delivering long-life and low-cost profitable gold mining operations

• Unparalleled leverage to the gold price given the combined company’s scale (2017 gold production actuals: Newmont = 5.3 million ounces; Goldcorp = 2.6 million ounces)

• A world-class portfolio of gold mining operations and projects in favorable jurisdictions

• Steady, profitable gold production targeting 6 to 7 million ounces over a decades-long time horizon

• Recognized industry leadership in environmental, social and governance performance

• A targeted sustainable annual dividend of $0.56 per share,1 the highest among senior gold producers

• A solid, investment-grade balance sheet

• An unparalleled project pipeline on four continents

• Exploration opportunities in the world’s most prospective gold districts

• The sector’s largest gold Reserves and Resource base



Structure and long-term leadership succession

Following the merger, management of Newmont Goldcorp will feature proven and experienced mining and business leaders at both the Board and executive team levels, along with diverse, high-performing teams at the combined company’s regional and operating sites.

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

Building on the depth of Newmont Goldcorp’s combined global talent pool, the Board will continue to focus on strategic leadership development, robust and thoughtful succession planning, and seamless leadership transitions. As part of a planned and orderly leadership succession process, Mr. Goldberg and Newmont’s Board have been engaged in discussions anticipating a CEO succession in early 2019. In October of 2018 the Company also announced Mr. Palmer’s promotion to President and Chief Operating Officer.

To ensure a smooth and successful combination, Mr. 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 fourth quarter of 2019, when Mr. Goldberg plans to retire and Mr. 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

• Newmont Goldcorp’s South America regional office will be in Miami, USA; 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, USA

• Newmont Goldcorp’s shares will be traded on the New York Stock Exchange using the ticker symbol NEM and expected to be listed for trading on the Toronto Stock Exchange (TSX) following closing of the transaction

Transaction terms

• Newmont to acquire all outstanding Goldcorp equity at an exchange ratio of 0.3280 of a Newmont share and $0.02 for each Goldcorp share

• Goldcorp equity value of $10 billion, with premium, and enterprise value of $12.5 billion

• A 17 percent premium based on Newmont’s and Goldcorp’s 20-day VWAP share prices as of January 11, 2019

• Newmont and Goldcorp shareholders will own approximately 65 percent and 35 percent of the combined entity, respectively

• Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporation Act (Ontario)

• Agreement provides for customary deal protection provisions, including mutual non-solicitation covenants and rights to match superior proposals

• Under certain circumstances, Newmont would be entitled to a $350 million break-fee (3.5 percent of Goldcorp’s equity value) and Goldcorp would be entitled to a $650 million break-fee (3.5 percent of Newmont’s equity value)

• Each of Goldcorp’s and Newmont’s directors and certain members of the executive leadership team have entered into voting support agreements agreeing to vote their shares in favor of the transaction

Path to close

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 second quarter of 2019. Closing of the transaction 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.

Benefits to Canada

The formation of Newmont Goldcorp ensures that Canada’s gold industry will participate in a world-leading natural resources company that operates responsibly, is invested in the long-term success of its properties, and has the financial strength to explore and develop the next generation of significant gold mines. As part of this combination, Newmont Goldcorp plans to:

• Preserve jobs in Canada by designating Goldcorp’s current Vancouver headquarters as Newmont Goldcorp’s North America regional office – this regional office will oversee all of Newmont Goldcorp’s properties in Canada and the United States

• Have the Vancouver office oversee North American operations with combined gold production of more than three million ounces per year – more than three times Goldcorp’s current Canadian gold production

• Make Newmont Goldcorp’s Vancouver office the base for certain of Newmont Goldcorp’s global functions and centers of excellence, including global oversight of Indigenous community relations

• Maintain a significant Canadian presence on Newmont Goldcorp’s Board of Directors and among the management of Newmont Goldcorp’s Canadian properties

• Honor all of Goldcorp’s commitments to Indigenous communities to ensure their interests are acknowledged and protected

• Seek to list Newmont Goldcorp’s shares for trading on the TSX

• Make new investments in a reinvigorated exploration program in Canada

• Provide ongoing and long-term employment for highly skilled jobs at Newmont Goldcorp’s properties in Canada

• Maintain a commitment to environmental sustainability and to the health and safety of its workers

• Continue contributions to organizations in the communities where Newmont Goldcorp operates to support charitable, social, recreational, and community development programs