TORONTO - Merger talks between Barrick Gold Corp. and U.S.-based Newmont Mining Corp. have broken off, a deal which would have combined two of the world's largest gold producers.
Barrick said Monday that although it believes the interests of shareholders are best served through a merger, Newmont's board has decided that the interests of Newmont's shareholders are best served by remaining independent.
Long-speculated about, such a merger would have allowed the companies to combine their operations in Nevada and save millions in overhead, supply contracts and staffing.
Newmont is one of the world's largest gold producers with assets or operations on five continents.
Barrick Gold holds its annual shareholder meeting on Wednesday and chairman Peter Munk will be stepping down then.
In a recent interview with Bloomberg TV, Munk said the companies have talked several times about deal over the years and that it has "always made sense."
Munk, now 86, started Barrick in 1983 and would build the company into the largest gold miner by production with the acquisition of Placer Dome in 2006.
Despite Munk's successes, Barrick has struggled in recent years and its stock trades for less than half what it did less than two years ago.
The company has reported losses the past two years as it took US$6.3 billion in impairment charges in 2012 and another US$12.7 billion in last year.
Concerns also were raised about Barrick's debt levels, largely due to its ill-fated acquisition of copper miner Equinox Minerals in 2011, and it was forced to put its Pascua-Lama project in South America on hold last year after massive cost overruns and protests from an indigenous community living below the project. Their efforts to have Barrick's licence revoked and force a new environmental impact study was turned down by the Supreme Court of Chile, but it put construction on hold until Barrick's environmental commitments and work to protect the water systems is completed.
As part of its plan to turn things around, Barrick is shedding what it deemed non-core operations, selling several smaller mines in Australia, a minority stake in another one in Nevada as well as a portion of its stake in African Barrick Gold, and raised nearly $3 billion in an stock offering that was used to repay debt.