TORONTO -- Bluster has given way to pragmatism as the world's two largest gold miners have agreed to partner-up in Nevada.

Barrick Gold Corp. said Monday it will drop its US$17.8-billion hostile takeover offer for Newmont Mining Corp. and instead enter into a joint venture with its rival in the state, moving past a dust-up between CEOs over leadership and competence.

In the end, the promise of significant cost savings by co-ordinating operations at their vast Nevada mining sites helped bring the two sides together.

"Our joint venture will allow us to tear down the fences and operate our assets as one mining complex, making the best use of our combined infrastructure," Barrick chief executive Mark Bristow told a conference call.

"This agreement also paves the way for both Newmont and Barrick to unlock more value than either of us could create alone," Newmont CEO Gary Goldberg said on the call.

The promised savings amount to US$500 million a year before taxes in the first five years, and US$4.7 billion over 20 years, though analysts have raised doubts.

"Projected synergies over 20 years is something the market will be questioning, certainly as the magnitude of the synergies are rather large and given that the 20-year time period is more than the current reserves life," GMP Securities analyst Steven Butler wrote in a note to clients.

RBC has estimated annual savings of US$340 million pre-tax, or US$250 million after tax, which it figures is currently worth about US$2.6 billion over 20 years and significantly less than company estimates.

"This is above our more conservative published estimate," said RBC Dominion Securities analyst Stephen Walker on the Barrick estimates in a note.

Haywood Securities analyst Kerry Smith noted that while there are undeniable operating synergies, the totals might not be achieved.

"We have rarely seen two entities achieve the level of synergy expected due to cost creep, negative inertia and overly optimistic assumptions and as a result we remain somewhat skeptical of the magnitude of synergies suggested," he said.

It will fall to Barrick to assure the cost savings are met after the company secured the role of operator over the joint venture with a 61.5 per cent stake to Newmont's 38.5 per cent.

"There is only one responsible person and that's Barrick to deliver on the plan," Bristow said.

The Barrick chief executive had earlier held off on a joint venture because Newmont was insisting on control even though it didn't bring "that sort of value."

The deal Monday has Newmont handing over partial control in Nevada to a leadership team that Goldberg had disparaged for pursuing "hostile and value-destructive tactics" and creating "anaemic" growth at a predecessor company.

Goldberg made the comments after Barrick launched its hostile takeover for Newmont in February. Denver-based Newmont had pushed back as not wanting to take on what it characterized as Barrick's risky global portfolio.

For Newmont, the new deal means it will be able to continue with a proposed friendly takeover of Vancouver-based Goldcorp Inc., which said it fully supports Monday's joint venture.

The combined operations will include Barrick's Goldstrike, Cortez, Turquoise Ridge, Goldrush mines and other assets as well as Newmont's Carlin, Twin Creeks, Phoenix, Long Canyon, and Lone Tree mines.

The companies say the Nevada complex will be the world's largest gold producer, based on 2018 production of 4.1 million ounces.

The establishment of the joint venture is subject to conditions, including regulatory approvals, and is expected to be completed in the coming months.