Gold miner Randgold unveils £13.7bn merger with Barrick

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A mega-merger in the mining space was announced on Monday as Randgold Resources agreed to an all-share takeover by Barrick Gold.

The deal will also give Barrick a much bigger presence in Africa, where Randgold has mines in Mali, Senegal, Côte d'Ivoire and the Democratic Republic of Congo.

The price of gold has fallen more than 8% this year, putting all gold producers under pressure. Bristow has long criticised the volume over value approach of gold mining companies whilst Thornton - a former banker with Goldman Sachs Group - has espoused a strategy that seeks to recapture the entrepreneurial spirit of Barrick founder, Peter Munk, whlle adopting modern day investment morés in respect of the company retaining its truly world class gold deposits whilst freeing itself of the balance.

John Thornton, Barrick's executive chairman will hold the same role at the merged group, while Randgold chief Mark Bristow will be president and CEO. The company shed non-core assets outright, or sold stakes to partners, to fix its balance sheet, after its debt peaked at $15.8 billion in 2013.

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"In many ways, the strategies of the two companies are similar". Both firms are highly focused on production costs, aiming to build portfolios that generate free cash flow even if gold prices drop to as low as $1 000 an ounce.

In a statement, the companies said the deal would create a gold miner with the greatest concentration of so-called tier assets in the industry. Randgold shareholders will be entitled to receive a Randgold dividend for the 2018 financial year of $2.00 per Randgold share.

Barrick's majority-owned Acacia Mining Plc has been stuck in limbo after Tanzania imposed a ban on exports of mineral concentrates in 2017 and slapped a US$190 billion tax bill on the London-listed company.

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