Barrick Gold Corp. initially made an offer to buy Newmont Mining Corp., but was turned down. Instead, Newmont proposed the two establish a Nevada joint venture. On March 11, the two companies signed an implementation agreement to create the joint venture, which would combine their mining operations, assets, reserves and talent in Nevada.

Newmont’s assets in Nevada include Carlin, Phoenix, Twin Creeks, and Long Canyon properties while Barrick’s Nevada assets include the Cortez and Goldstrike properties.

CEO of Newmont Gary Goldberg said the logic of combining the two companies’ operations was compelling.

“This agreement represents an innovative and effective way to generate long-term value from our joint assets in Nevada, and represents an important step forward in expanding value creation for our shareholders,” Goldberg said. “Through the joint venture, we will also continue to pursue the highest standards in safety, along with responsible and meaningful engagement with our employees, communities, and other stakeholders.”

According to Barrick, the joint venture will allow them to capture an estimated $500 million in average annual pre-tax synergies in the first five full years of the combination, which is projected to total $5 billion pre-tax net present valueover a 20-year period.

Barrick President and Chief Executive Officer Mark Bristow said the deal has been 20 years in the making.

“We listened to our shareholders and agreed with them that this was the best way to realize the enormous potential of the Nevada goldfields’ unequalled mineral endowment, and to maximize the returns from our operations there,” Bristow said. “We are finally taking down the fences to operate Nevada as a single entity in order to deliver full value to both sets of shareholders, as well as to all our stakeholders in the state, by securing the long-term future of gold mining in Nevada.”

Following the completion of the joint venture, the Nevada complex will be the world’s single-largest gold producer, with a pro forma output of more than 4 million ounces (oz) in 2018, three tier one assets, potentially another one in the making, and 48 million oz of reserves, the companies said.

The agreement is expected to be completed in the next few months. The joint venture will exclude Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits, pending the determination of their commercial feasibility.

As a result of this agreement, Barrick has withdrawn its Newmont acquisition proposal announced on February 25.