Barrick Gold and Newmont Mining have signed an implementation agreement to create a joint venture (JV) combining their respective mining operations, assets and reserves in the US state of Nevada.

Earlier this month, Newmont rejected an unsolicited, all-stock negative premium merger proposal from Barrick after the former’s board of directors unanimously determined that the proposal was not in the best interests of its shareholders.

The JV will allow the companies to capture an estimated $500m in average annual pre-tax synergies in the first five full years of the combination.

With the combination of their operations in Nevada, Barrick and Newmont hope to save more than $5bn over a period of 20 years.

Barrick Gold president and CEO Mark Bristow said: “We listened to our shareholders and agreed with them that this was the best way to realise the enormous potential of the Nevada goldfields’ unequalled mineral endowment, and to maximise the returns from our operations there.

“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.”

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Subject to a number of conditions, including regulatory approvals, the JV establishment is expected to be completed in the coming months.

“This was the best way to realise the enormous potential of the Nevada goldfields’ unequalled mineral endowment.”

Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits will not be part of the JV.

Newmont Mining CEO Gary Goldberg said: “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.”

The JV will be operated and owned by Barrick, which will have a 61.5% interest in the project.