Newmont submits improved Newcrest offer
Newmont Corp. [NGT-TSX, NEM-NYSE] has submitted what it described as an improved and final offer to acquire Newcrest Mining Ltd. [NCM-TSX, ASX, PNGX], an Australian company with significant mining operations in Canada.
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.
Newcrest said Tuesday it has given 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.
Newcrest has indicated that it intends to grant exclusivity to Newmont during the due diligence, which is expected to be completed within approximately four weeks. Newcrest has also indicated that it intends to grant exclusivity to Newmont during the due diligence period, with the terms of that exclusivity still to be agreed.
Newmont announced its improved offer after the close of trading on April 10, 2023, when its shares closed at $69.02 on the Toronto Stock Exchange. The shares are currently trading in a 52-week range of $108.98 and $51.44. The offer price implies a premium of about 16% to Newcrest’s closing price of A$28.28 on April 6, 2023.
“This transaction would strengthen our 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,’’ said Newmont President and CEO Tom Palmer.
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. Imperial Metals Corp. (III-TSX) formed a joint venture with the Australian company at Red Chris in March 2019, after agreeing to sell a 70% stake in the mine to Newcrest, which is now the operator.
Imperial continues to hold a 30% stake in the joint venture, which aims to leverage the Australian company’s technical expertise in block caving operations.