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Dado Galdieri | Bloomberg | Getty Images
South America's largest gold mine, Yanacocha, is Newmont Mining Corp, Minas Buenaventura and International Finance Corp. joint venture.
Newmont Mining announced on Monday that it was buying a smaller competitor in the Goldcorp deal worth $ 10 billion, generating the world's largest gold producer in output.
The deal is the second high-profile merger in the mining industry, as Barrick Gold agreed to buy Randgold Resources Ltd last September to reduce costs.
The gold mining industry has been hit by investors in recent months due to poor capital management. This combination of a decline in gold reserves and higher extraction costs has prompted miners to look for cost efficiency.
"The strategic foundation for Goldcorp's merging with Newmont is very convincing at many levels," said Goldcorp CEO David Garofalo.
The merged entity is expected to produce 6 million to 7 million ounces of gold in the next 10 years. In 2017, Newmont produced 5.3 million ounces of gold, while Goldcorp gained 2.6 million ounces.
Newmont will offer 0.3280 of its shares and $ 0.02 for each Goldcorp share. Based on Newmont's Friday closing, which means $ 11.46 per share, a premium of about 18 percent on Goldcorp's Friday, close to the New York Stock Exchange.
The combined reserves and resources of the company will be the largest in the gold sector and will be located in favorable mining jurisdictions in America, Australia and Ghana.
Goldcorp's US listings were higher than 13 percent before Monday's call. Newmont Mining shares fell 2.6 percent.
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