Denver, USA-based Newmont Corp. said it has completed its due diligence with Australia’s Newcrest Mining Ltd. and has entered a binding agreement to acquire the company for A$26.2 billion ($17.3 billion). The combined portfolio is expected to deliver approximately 8 million ounces (oz) of total combined annual gold production upon closing, with more than 5 million oz from 10 large, long-life, low cost, Tier 1 assets. Newmont could also produce approximately 350 million lb/y copper from Australia and Canada.
“The combination of Newmont and Newcrest will create an industry-leading portfolio with a multi-decade gold and copper production profile in the world’s most favorable mining jurisdictions,” said Tom Palmer, president and CEO of Newmont. “Following a robust due diligence process, we have identified a number of opportunities to unlock substantial value and will apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-life, low-cost gold and copper assets. Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500 million in annual synergies and an estimated $2 billion in incremental cash flow from portfolio optimization opportunities.” The transaction will also increase the world’s largest gold miner’s annual copper production, adding nearly 50 billion lb of copper reserves and resources from Newcrest to its portfolio.
The transaction combines two of the world’s leading gold producers. “It will bring forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline,” said Newcrest Chairman, Peter Tomsett. “In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market-leading position in safety and sustainability.” Tomsett said the Newcrest board is recommending Newmont’s proposal unanimously.
The combination would also create an extensive portfolio of greenfield and brownfield growth options from the industry’s largest reserve and resource base. Newcrest’s 52 million oz of gold reserves would be added to Newmont’s 96 million oz of gold reserves. Newmont and Newcrest have reported 111 million oz and 68 million oz of gold resources, respectively.
Upon implementation, Newmont and Newcrest shareholders will own approximately 69% and 31% of the combined entity, respectively. Both companies are subject to customary exclusivity restrictions, including no-shop, no-talk, and no-diligence restrictions, subject to certain customary exceptions. The transaction is expected to close in the fourth quarter of 2023.
