Homestake shareholders give Barrick the nod

Homestake Mining‘s (HM-N) shareholders officially gave the green light to a planned takeover of the Walnut, California-based company by Barrick Gold on Friday, according to Reuters.

Shareholders voted 64.7% in favour of the all-stock deal, which will result in the creation of the world’s second largest gold mining company, behind South Africa’s AngloGold (AU-N), which is currently locked in a battle with Newmont Mining (NEM-N), North America’s biggest gold company by production, over Australia’s Normandy Mining (NDY-N).

In late June, Barrick announced plans to purchase Homestake in a paper deal worth US$2.3 billion. Barrick’s offer includes 0.53 of a share for each of Homestake’s 263.3 million shares outstanding. This results in the issuance of 139.5 million new shares, increasing Barrick’s total number outstanding to 535.5 million.

Homestake brings to the table 12 major mines in four countries hosting combined reserves of 20.8 million oz. The mines produced 2.2 million oz. last year at a total cash cost of US$174 per oz. The addition would bring Barrick’s production to about 6 million ounces. The post-merger company’s market capitalization is pegged at about $9 billion.

Barrick shares were US58 higher at US$16.25 in afternoon trade on the New York Stock Exchange; Homestake was up 19 to US$8.58.

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