Newmont Spars With Barrick on Nevada Venture as Notice Sent

Denver-based Newmont has been critical of Barrick’s management after output declines and rising costs. Photo by Handout/Barrick Ming Corp./Postmedia filesArticle content(Bloomberg) — Newmont Corp. sent Barrick Mining Corp. a so-called notice of default after finding evidence of alleged mismanagement at a Nevada joint venture, escalating tensions between the partners in a key US mining region.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentBarrick allegedly diverted resources from the Nevada Gold Mines venture to benefit its wholly owned Fourmile project, Denver-based Newmont said in a filing to the US Securities and Exchange Commission on Thursday.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle contentAfter informing Barrick of the alleged issue last month, Newmont sent Barrick the notice in early February, the filing said. Under the companies’ 2019 joint-venture agreement, a partner accused of breaching the pact typically has 30 days to remedy the issue or begin corrective action. If a dispute isn’t resolved, it may be taken to court in Nevada, according to the agreement.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“While we disagree with Newmont’s claims, we are limited by the terms of the joint venture agreement in what we can say,” Barrick President and Chief Executive Officer Mark Hill said in a statement to Bloomberg News. “We are committed to constructive engagement and to working together with Newmont to deliver shareholder value.”Article contentNewmont shares slid 2.7% as of 12:20 p.m. Friday in New York, while Barrick was down 1.8%.Article content“The terms for resolving such disputes are laid out in the JV agreement,” Citigroup Inc. analyst Alexander Hacking said in a note. “But we believe this will likely be viewed by investors as part of ongoing negotiation/positioning over the future of NGM.”Article contentNewmont’s actions may complicate Barrick’s plans to separate its North American assets and sell a 10% to 15% stake in the new company later this year. A spinoff would include its interest in the Nevada venture known as NGM — of which Barrick owns 61.5% and Newmont 38.5% — along with the Fourmile project and a mine in the Dominican Republic, another collaboration with Newmont.Article contentArticle contentNewmont wants Barrick to address what it sees as underperformance at the Nevada assets before going ahead with the IPO, Bloomberg News reported last week, citing people familiar with the matter. The miner has been critical of Barrick’s management after output declines and rising costs, the people said.Article contentIn its 10-K filing to the SEC, Newmont said: “Although we continue to work with Barrick to improve the performance of NGM and will take appropriate steps to address this matter, any such disagreements could have a material adverse effect on our interest in NGM, the business of NGM or the portion of our growth strategy related to NGM.”Article contentNewmont CEO Natascha Viljoen highlighted a focus on improving the Nevada operations during an earnings call with analysts on Thursday.Article content“Discussions have been predominantly around the improvement of the performance of Nevada, and, I think, a very constructive relationship to work together to improve that performance — which we believe would be in the best interest of all of our shareholders,” she said.Article content(Adds analyst comment and shares from fifth paragraph.)Article contentTrending Posthaste: U.S. tariffs against Canada keep falling, but is that just the quiet before the CUSMA storm? 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