Newcrest Mining is expected to offer the Canadian gold producer $18.50 a share, suggesting a valuation of about US$2.8 billion. The transaction has already been unanimously recommended by Pretium’s board, although it is yet to secure the approval of two-thirds of the company’s shareholders.
Pretium fully owns the Brucejack gold mine, which is located close to Newcrest’s Red Chris mine in British Columbia, and therefore, the proposed acquisition is expected to immediately add more than 300,000 ounces of gold output a year for the Australian miner, boosting its annual production to more than 2 million ounces. According to Newcrest’s managing director and CEO, Sandeep Biswas, the transaction would also expand the company’s footprint in Canada’s highly prospective Golden Triangle region.
“Our strategy is to specialize in low-cost, long-life and large-scale gold mines, and this is certainly that,” he said on a media call. “The really exciting thing is the expansion potential. We believe there’s a lot more gold there.”
Last year, Newcrest added a new listing on the Toronto Stock Exchange with the aim of extending its exposure to projects in the Americas. The company already owns a shareholding of 4.8 per cent in Pretium, and under the proposal shareholders of the Canadian mining company may opt to receive 0.8084 Newcrest shares for each Pretium share, or a combination of cash and shares.
According to recent reports, the three months which ended on 30 September was another profitable quarter for Pretium, with $0.12 in net earnings per share and $0.13 in adjusted earnings per share, despite a 5.2 per cent drop in revenue from the third quarter of 2020.
