Newmont given more time to probe Newcrest assets

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Newcrest Mining Ltd. [NCM-TSX, ASX, PNGX], an Australian company with significant mining operations in Canada, said it has extended the exclusivity period that allows Newmont Corp. [NGT-TSX, NEM-NYSE] to conduct due diligence on its assets.

The move comes after Newmont submitted what it described as an improve and final offer to acquire Newcrest. Under the non-binding indicative proposal, Newcrest shareholders would receive 0.40 Newmont shares for each Newmont share. In addition, Newcrest would have the right to fund and pay to its shareholders a special dividend of US$1.10 per share.

On April 14, 2023, Newcrest said it had granted Newmont exclusivity until midnight on May 11, 2023 to allow the U.S. gold mining giant to conduct confirmatory due diligence on an exclusive basis.

In a press release, Newcrest said Newmont has substantially completed due diligence and Newcrest has agreed to extend Newmont’s exclusivity until midnight on May 18, 2023 on the same terms as previously announced, to provide further time for Newmont to complete its due diligence and submit a binding offer.

However, it said there is no certainty that the revised proposal will result in a binding offer for consideration by shareholders.

News that Newmont has been given more due diligence time came after the close of trading on May 11, 2023, when Newcrest shares closed at $25.32. The shares are currently trading in a 52-week range of $27.44 and $13.81.

Newcrest gave Newmont due diligence access to its books following the improved offer which values the Australian company at US$19.54 billion, up from an earlier proposal which is estimated to be worth US$16.9 billion.

Newmont President and CEO Tom Palmer has said any move to acquire Newcrest would strengthen Newmont’s position as the world’s leading gold company by joining two of the sector’s top senior gold producers. and setting the new standard in safe, profitable and responsible mining

Newmont is the world’s leading gold company and producer of copper, silver, zinc and lead. It has operations in North America, South America, Australia and Africa. They include Nevada Gold Mines LLC, a joint venture with Barrick Gold Corp. [ABX-TSX, GOLD-NYSE], which currently ranks as the world’s single largest gold-producing complex. Nevada Gold Mines is operated by Barrick Gold. It is a joint venture held 61.5% by Barrick and 38.5% by Newmont.

Newcrest is Australia’s leading gold miner and has major gold and copper operations in British Columbia. A year ago, Newcrest snapped up the Brucejack gold mine in B.C. by acquiring all the shares of Pretium Resources it didn’t already own for $2.8 billion.

Brucejack is a high-grade gold underground mine located in northwestern British Columbia, approximately 65 kilometres north of Stewart.

Brucejack is approximately 70 kilometres north of Newcrest’s Red Chris copper-gold mine.

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