Gold giant sizes up rival

Newmont eyes Newcrest

GOLD giant Newmont has pitched a $77bn gold megamerger with Newcrest Mining, in an all-scrip deal that would cement its position as the biggest gold company in the world.

Newcrest confirmed on Monday it had received an allscrip offer from Newmont, offering 0.38 of its own shares for each Newcrest share on issue. Newcrest said the offer was an improvement on a previous bid of 0.363 Newmont shares for each of its own shares.

The revised offer implies a $27.16 valuation on each Newcrest share and a 21 per cent premium to Friday’s closing price, valuing Newcrest at about $24.5bn.

The company said its board had rejected the earlier offer as it “would not deliver sufficiently compelling value to shareholders”.

The merger, if agreed, would extend Newmont’s position as the biggest gold miner in the world, adding Newcrest’s Australian and PNG assets to Newmont’s top tier global suite.

It extends the run of blockbuster gold mergers over the past five years, kicked off by Barrick’s acquisition of Randgold and Newmont buying GoldCorp in 2018 and 2019, and pushed forward more recently by Agnico Eagle’s merger with Kirkland Lake in 2022, and then the bidding war between Gold Fields and Agnico Eagle over the future of Yamana Gold.

Newcrest said on Monday it was considering the indicative proposal, which was subject to Newmont receiving exclusive access to Newcrest’s books, along with regulatory approvals in Australia and elsewhere.

Newmont already operates the Boddington and Tanami gold mines in Australia, as well as two gold mines in Ghana, six in North America and four in South America.

The deal would unite three of Australia’s five biggest gold mines under Newmont’s ownership, delivering Newcrest’s Cadia operations into a group that includes Boddington and Tanami.

Newcrest’s Lihir mine in Papua New Guinea is also one of the region’s biggest gold mines.

On top of that, Newmont would acquire Newcrest’s toptier project pipeline, including the potential expansion of Telfer through the nearby Havieron deposit, the long-stalled Wafi-Golpu project in PNG and its strong options in Ecuador, including Newcrest’s stake in troubled explorer SolGold and its relationship with Canada’s Lundin Gold.

The Newmont bid catches Newcrest during a period of transition, with the company still looking for a new chief executive following the sudden departure of long-term boss Sandeep Biswas in late-2022.

Newmont is considering a secondary listing on the Australian stock market if its bid is successful.

Newcrest shares rallied 9.3 per cent to $24.53 on Monday.