A significant obstacle has emerged for Barrick Gold’s strategy to spin off a portfolio of its North American assets. Newmont Corporation, Barrick’s partner in the massive Nevada Gold Mines joint venture, is invoking contractual protections, demanding operational improvements before it will support the move. This development throws a wrench into Barrick’s restructuring plans and highlights simmering tensions over the performance of their shared operations.
Contractual Rights Take Center Stage
In a recent statement, Newmont emphasized that any transaction involving their joint ventures must fully respect the established agreements, specifically citing transfer restrictions. The mining giant pointed directly to the Nevada Gold Mines operation, asserting it has experienced a “deterioration in performance and the resulting asset value” over the past six years. Newmont stated it is taking appropriate steps to address these concerns with Barrick, with the goal of reversing the operational decline and better realizing the assets’ full potential.
The core of the dispute hinges on whether Barrick’s proposed initial public offering (IPO) would trigger a “change of control” provision. According to analysts cited by Bloomberg, such a trigger would activate Newmont’s contractual right of first refusal, giving it the option to buy the assets before anyone else. Barrick may therefore attempt to structure the IPO in a way that avoids this classification.
Barrick’s Strategic Pivot Faces Hurdles
Barrick’s plan involves bundling several key North American gold assets into a new, separately listed entity. This portfolio would include its 61.5% stake in Nevada Gold Mines, its interest in the Pueblo Viejo mine in the Dominican Republic, and its wholly-owned Fourmile development project in Nevada. The company aims to sell between 10% and 15% of this new unit to public investors.
However, Newmont’s position, backed by its interpretation of the joint venture terms, suggests Barrick requires its partner’s consent to proceed. This creates a substantial complication for Barrick’s strategic effort to streamline its portfolio and unlock value.
Should investors sell immediately? Or is it worth buying Newmont Mining?
Key Details of the Situation:
* Joint Venture Structure: Nevada Gold Mines is owned 61.5% by Barrick and 38.5% by Newmont.
* Newmont’s Stance: The company insists on operational improvements at the JV before endorsing any steps toward an IPO.
* Planned IPO Assets: The new entity would hold stakes in Nevada Gold Mines, Pueblo Viejo, and the Fourmile project.
* Market Reaction: Following the news, Newmont’s shares advanced 3.9%, while Barrick’s stock gained 2.5%.
Broader Operational Pressures Add Context
The contractual dispute unfolds against a challenging operational backdrop for Barrick. Reports indicate the company is facing its sixth consecutive year of declining production in 2025, hitting its lowest output level in at least a quarter-century. Further production decreases are anticipated for 2026, including within the Nevada operations.
Nevada Gold Mines was formed in 2019 after Barrick abandoned a hostile takeover bid for Newmont, opting instead to merge their neighboring Nevada assets. The transfer restrictions now being cited by Newmont were embedded in those original formation agreements.
To date, Barrick has not issued a public response to Newmont’s statement. Furthermore, media reports suggest Barrick management declined to confirm during a recent investor call whether any discussions with Newmont regarding the right-of-first-refusal clauses have taken place.
Ad
Newmont Mining Stock: Buy or Sell?! New Newmont Mining Analysis from February 10 delivers the answer:
The latest Newmont Mining figures speak for themselves: Urgent action needed for Newmont Mining investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 10.
Newmont Mining: Buy or sell? Read more here...
