This article first appeared on GuruFocus.

Newmont Corp. (NYSE:NEM) has moved to formally challenge Barrick Mining Corp. (NYSE:B) over the management of their Nevada Gold Mines joint venture, escalating what could become a pivotal dispute in one of the industry's most important gold-producing regions. In a filing with the US Securities and Exchange Commission, Newmont said it identified evidence that Barrick may have diverted resources from Nevada Gold Mines, or NGM, to support its wholly owned Fourmile project. After raising the issue last month, Newmont sent a notice of default in early February, triggering a 30-day window under the 2019 joint-venture agreement for Barrick to remedy the matter or begin corrective action, with unresolved disputes potentially heading to a Nevada court.

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Barrick, which holds 61.5% of NGM compared with Newmont's 38.5%, has pushed back on the allegations. President and Chief Executive Officer Mark Hill said the company disagrees with Newmont's claims but is limited by the terms of the joint venture agreement in what it can disclose publicly. He added that Barrick remains committed to constructive engagement and to working alongside Newmont to deliver shareholder value. The timing is notable, as Barrick is preparing to separate its North American assets and sell a 10% to 15% stake in the new company later this year. That proposed spinoff would include its interest in NGM, the Fourmile project, and a mine in the Dominican Republic that is also operated as a joint venture with Newmont, potentially raising questions about execution if tensions persist.

For investors, the underlying issue appears to center on operational performance in Nevada. Bloomberg News previously reported that Newmont wants Barrick to address what it sees as underperformance at the Nevada assets before proceeding with an IPO, citing output declines and rising costs. In its 10-K filing, Newmont cautioned that disagreements with Barrick could have a material adverse effect on its interest in NGM, the venture's business, or the portion of its growth strategy tied to NGM. Chief Executive Officer Natascha Viljoen told analysts that discussions have been predominantly focused on improving performance in Nevada, describing the relationship as constructive and aimed at outcomes that could serve the best interests of shareholders.

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