Barrick Gold Corporation (B.US) stock price plummets; the $1.95 billion settlement has been deemed "too low."

Barrick Gold Corporation (B.US) fell 6.4% on Monday due to investor disappointment over its settlement agreement with Newmont Corporation (NEM.US), which aims to resolve a dispute between the two companies regarding the Nevada gold mining joint venture, paving the way for Barrick to advance its North American mining assets for a public listing in the U.S. Meanwhile, Newmont's stock rose by 3.8%. According to the agreement announced on Monday, Newmont will pay Barrick $1.95 billion, while both companies will inject previously unaccounted assets into the joint venture, including Barrick's Fourmile project, as well as Newmont's Fiberline and large Mike gold mining development projects. Analysts Grant Sporre and Emmanuel Mongerie stated, Considering the quality of the assets, even though this transaction clears a key hurdle for a North American IPO and reshapes the relationship with Newmont, the transaction amount still seems a bit low. Despite the settlement agreement removing obstacles for Barrick to pursue an IPO for its gold assets in North America, Citigroup analyst Alexander Hakin noted that the deal size may fall below some investors' expectations, since investors generally believe the Fourmile asset is worth around $10 billion to $20 billion, while the amount Newmont paid for its 38.5% stake could be between $4 billion and $8 billion. TD Cowen analyst Steven Green remarked that Newmont's acquisition of the Nevada joint venture stake was a significant bargain, as the $1.95 billion paid to Barrick is well below his estimated intrinsic value of $6.6 billion for the 38.5% stake in Fourmile, giving Newmont a very attractive price and is expected to increase its valuation by $4.7 billion. Green indicated that by injecting the Fourmile project into the Nevada joint venture, Barrick can also benefit, which should eliminate costly feasibility studies, utilize existing local infrastructure, and potentially save over $1 billion for the joint venture.