Newmont’s Newcrest takeover cleared by Competition Bureau

Newmont Corp. [NGT-TSX, NEM-NYSE] said the Canadian Competition Bureau has issued a “no action” letter clearing the U.S. gold mining giant’s previously announced deal to acquire Newcrest Mining Ltd. [NCM-TSX, ASX, PNGX], an Australian company with significant mining operations in Canada, including British Columbia’s Golden Triangle region.

Newmont shares advanced on the news, rising 2.2% or $1.28 to $60.13. The shares are currently trading in a 52-week range of $76.08 and $51.44.

The announced comes two months after Newmont announced a definitive deal to acquire Newcrest.

Under the agreement that combines two of the world’s leading gold producers, Newcrest shareholders will receive 0.40 Newmont shares for each Newmont share. Once the deal takes effect, Newcrest can fund and pay to its shareholders a special dividend of US$1.10 per share, an amount that represents a 30.4% premium, Newmont said.

Once complete, the transaction will solidify Newmont’s position in Canada through a combination of operating mines and development projects, creating a Tier 1 district in B.C.’s highly-prospective Golden Triangle.

On April 14, 2023, 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. News of a definitive deal comes just days after Newcrest agreed to extend the due diligence period until midnight on May 18, 2023.

Newmont has agreed to acquire Newcrest by way of an Australian Scheme of Arrangement, under which it will acquire 100% of the issued and outstanding shares of Newcrest.

Newmont President and CEO Tom Palmer has said the 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.

“This transaction increases Newmont’s copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio,’’ Palmer said.