Barrick and Newmont merger: What does that mean for Europe?

goldThere’s a lot of discussion in the financial world about the potential merger between the Barrick and Newmont, top two gold giants. FT said their combined output would place them in a position three times higher than AngloGold Ashanti, the third largest gold producer in the world.

It’s a stake of $0.5-1 bln synergy, a trial to reclaim shareholder value, to bounce back from the 60% drop they have seen in their stock charts. The drop is mainly due to the fact that gold prices have dropped below cash costs ever since early 2013 and have failed to rise in a consistent way even with the Ukrainian instability. But there’s something more to the merger than I’ve read in all articles.

The executives at both companies are quoted by journalists and analysts as being extremely Americas, Africa & Australasia focused. None of them have even mentioned the two companies’ investments in Europe, which is not a surprise, given the fact that they have no major direct stake in any of Europe’s largest exploration or operating vehicles. I only know of Barrick’s investment in Carpathian Gold (later acquired by Eldorado Gold) and Newmont’s in Gabriel Resources.

Other European operations are run by Agnico Eagle (Finland), Ortac Resources (Slovakia), Boliden (Norway, Sweden, Finland, Denmark, Ireland), Dalradian Resources (Northern Ireland), EMED Mining (Slovakia), Orvana (Spain), Nordic Mines (Sweden), Eldorado (Turkey, Greece, Romania).

Will we see more movement in Europe after the giant merger? Or will they decide to divest and refocus on their traditional grounds?

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