Newmont Corporation (TSE: NGT) (NYSE: NEM) (FRA: NMM) has publicly voiced concerns about Barrick Mining Corp‘s (TSE: ABX) (NYSE: B) (ETR: ABR0) management of their Nevada Gold Mines joint venture, highlighting continual operational failures.
Newmont executives have pointed to six consecutive years of declining production and rising costs that have worn away at the asset’s value since the initiation of their collaboration in 2019. These concerns first came to light in a report from Bloomberg this week, citing people familiar with the matter.
Barrick controls 61.5 per cent of the venture and oversees its activities while Newmont holds 38.5 per cent. The pair put their Nevada operations together roughly seven years ago when Barrick abandoned a hostile takeover bid.
Newmont representatives argue that issues faced by incompetent oversight of the JV have prevented the mines from capitalizing on the current price of gold as output hits 25-year lows. They are demanding that Barrick correct these operational inefficiencies.
This development sent Barrick shares up by 2.5 per cent on Feb. 9 while Newmont stock rose by 3.9 per cent. Investors perceived Newmont’s efforts to safeguard its stake in NGM favourably for efficiency in the long-term.
Analysts from firms like Jefferies Financial Group Inc (NYSE: JEF) and the National Bank of Canada (TSE:NA) (OTCMKTS: NTIOF) (FRA: NBC) have suggested that Newmont is eyeing enhanced control over the Nevada assets considering its past acquisition interest and the fact that the joint venture accounts for about 60 per cent of Barrick’s market value.
Barrick is pushing forward with its efforts to spin off its North American operations into a standalone entity dubbed “NewCo.” It will consist of the Nevada Gold Mines operations; the Fourmile project, also in Nevada; and Pueblo Viejo, situated in the Dominican Republic.
The initial public offering, accounting for 10 to 15 per cent of the company, is slated to be launched by the end of 2026. The unit could potentially be valued in excess of US$60 billion.
However, Newmont’s demands could potentially delay or alter the timeline as Barrick works toward streamlining NGM infrastructure.
In the midst of Nevada’s prolific mining scene, smaller companies like NevGold Corp (CVE: NAU) (OTCMKTS: NAUFF) (FRA: 5E50) are helping to lay the groundwork for future gold production while also targeting antimony.
Read more: NevGold Corp. advances toward gold-antimony resource with expanded Nevada drilling
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