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Monday, January 14, 2019

News Note: Newmont Mining Buys Goldcorp

Today we get this news on CNBC that major gold miner Newmont will be buying out Goldcorp creating "the world's biggest gold producer by output". Below are a couple of excerpts and then some added comments.


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"Newmont Mining said on Monday that it would buy smaller rival Goldcorp in a deal valued at $10 billion, creating the world’s biggest gold producer by output.

The deal is the second high-profile merger in the mining industry since Barrick Gold agreed to buy Randgold Resources Ltd in September last year to cut costs."

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My added comment: Having worked in the oil and gas industry for many years at a company that buys oil and gas reserves from other companies, I can observe that these large mergers/buyouts in the gold industry suggest that the executives for those companies think that gold is near a bottom for it's price cycle and likely to start into a longer term move higher (start a new upleg cycle). If you believe that, you would be very aggressive in trying to buy up as many reserves as possible before prices go somewhat higher. So I would tend to interpret this news in that way.

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