MELBOURNE, Feb 6 Reuters Breakingviews Whats a company to do when a rival is looking for a new chief executive amidst some production snafus? Buy it, of course. Thats precisely what Newmont boss Tom Palmer has just done, offering 17 billion in stock for Australian gold excavator Newcrest Mining.

At present Newmont is offering a 22 premium to the targets undisturbed share price, after Newcrest rejected an earlier 17 boost. That would require cutting around 18 from annual operating costs, Breakingviews calculates. Thats reasonable for two companies in the same sector that overlap in many regions.

What Canadas Barrick Gold does in response is the main question. Boss Mark Bristow tried to buy Newmont in 2019 after the latter agreed to snap up Goldcorp. His nilpremium attempt failed, although they did set up a joint venture for their Nevada operations. Bristows predecessor had previously flirted with buying Newcrest.

Newmont might appear to have the upper hand over Barrick at first glance. It is the worlds largest gold miner, which at 40 billion sports a market capitalisation 25 higher than Barricks. Merging the two would reunify Newmont with a company which was initially set up as the suitors Australian subsidiary almost six decades ago.

Barrick, though, trades at almost 26 times the next 12 months earnings, according to Refinitiv data, on rough par with Newmont. Its net cash position gives it a bit more balancesheet flexibility than Newmont, whose net debt is roughly…