Newmont Corporation has confirmed that it has submitted a non-binding proposal to acquire 100% of the issued share capital of Newcrest Mining Limited (Newcrest) by way of a scheme of arrangement.

According to Newmont, the proposed transaction would combine two of the sector’s top senior gold producers, and set the standard for sustainable and responsible gold mining.

Meanwhile, Newmont’s proposal to combine with Newcrest is on the basis of 0.380 Newmont shares per Newcrest share, which would result in the combined company being 30 percent owned by Newcrest and 70 percent owned by Newmont. This represents a compelling opportunity for the shareholders of both companies to share in the upside of putting together two complementary businesses.

Newmont’s proposal is subject to certain customary conditions, including due diligence to the satisfaction of both parties, entry into a scheme implementation agreement, and a recommendation from the Newcrest Board of Directors that Newcrest shareholders vote in favor of the proposal.

Mr Tom Palmer, the President and Chief Executive Officer (CEO) of Newmont spoke highly of the acquisition, noting that it will help the company and its shareholders.

“We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce, and the communities in which we operate. The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s Board of Directors.”
Mr Tom Palmer

Acting in the Best Interest of Shareholders

Newmont said it remains fully committed to acting in the best interest of Newmont shareholders. Newmont and its Board of Directors used the opportunity to advise that shareholders need not take any action at this time as there can be no certainty that a transaction will be concluded.

Newmont, moreover, noted in a statement that it has engaged BofA Securities, Centerview Partners LLC and Lazard as its financial advisers, and King & Wood Mallesons and White & Case LLP as its legal advisers.

Newcrest Mining Limited is an Australian-based corporation that engages in the exploration, development, mining, and sale of gold and gold-copper concentrate. It is Australia’s leading gold mining company and its operations have expanded beyond Australia, for example Indonesia, thus becoming a prominent international mining corporation. Newmont Mining Corporation initially started the company as a subsidiary in 1966. The subsidiary became Newmont Holdings Pty Ltd in 1980 and in 1990 acquired 100 per cent of Australian Holdings Ltd taking the current name.

Newcrest has a portfolio of low cost, long life operating mines, a strong pipeline of growth projects and highly prospective brown and greenfield exploration projects. The company has a substantial reserve and resource base combined with a long reserve life.

It has gold reserves of 42.8Moz and copper reserves of 4.67Mt and gold resources of 80.0Moz and copper resources of 14.36Mt. Following the completion of the hedgebook buy-back in June 2008, Newcrest is now an unhedged gold producer. Low gearing and a strong balance sheet places the company in a good position to fund major development projects and capitalize on external growth opportunities.

Newmont Corporation is an American gold mining company based in Greenwood Village, Colorado. It is the world’s largest gold mining corporation. Incorporated in 1921, it owns gold mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname. In addition to gold, Newmont mines copper, Silver, zinc, and lead.

Newmont has approximately 31,600 employees and contractors worldwide and is the only gold company in the Standard & Poor’s 500 stock market index. Newmont is spending $500 million on renewable energy projects through 2025 towards its commitment to reducing carbon emissions by 30% by 2030.