Merger Talks of 2 Mining Giants Devolve Into Dueling Statements

Merger talks between two gold mining firms have devolved into a war of words.

Until recently, Barrick Gold and Newmont Mining appeared eager to strike a deal, which would have combined the world’s two biggest gold mining firms. But on Monday, Barrick, based in Toronto, released a statement announcing that Newmont had decided to terminate the discussion, igniting a seething back-and-forth between the companies.

“Although Barrick believes the interests of shareholders are best served through the completion of this business combination, Newmont’s board has determined that the interests of Newmont’s shareholders are best served by remaining independent,” Barrick said in the statement.

The companies had previously identified $1 billion in possible cost savings, which would be realized in large part by combining their adjacent mining operations in Nevada. They have been in on-and-off merger talks for two decades.

For its part, Newmont made public a letter that it had sent to Barrick on Friday. The letter, signed by Newmont’s chairman, Vincent A. Calarco, criticized Barrick’s top leaders.

“While our team has found your management team’s engagement to be constructive and professional, the same constructive nature cannot be said of our discussions with your co-chairman on certain fundamental strategic and structural issues over the past two weeks,” Mr. Calarco said in the letter, referring to John L. Thornton, the co-chairman of Barrick. Newmont claimed in the letter that it was “twice told definitively” by Mr. Thornton that the merger process was “dead.”

The letter also singled out Peter Munk, 86, the departing chairman and founder of Barrick, who said last week in an interview with The Financial Post that Newmont was “not shareholder-friendly.”

Mr. Munk is set to step down as chairman on Wednesday and will be succeeded by Mr. Thornton.

But neither company was finished yet.

On Monday afternoon, Barrick released another statement contending that the two companies agreed upon and signed a term sheet on April 8. Newmont “has sought to renege” on key elements in the term sheet, including the location of the combined company’s main office, Barrick said.

Newmont countered soon after, saying that it “did not renege and strongly disagrees with Barrick’s characterization of events that followed.”