Newmont Corporation has submitted a revised non-binding indicative proposal to the Board of Directors of Newcrest Mining Limited (Newcrest) to acquire 100 per cent of the issued share capital of Newcrest by way of an Australian Scheme of Arrangement, under which Newcrest shareholders would receive 0.400x Newmont shares per each Newcrest share held.

In addition, Newcrest would have the right to fund and pay to its shareholders a special dividend of up to USD$1.10 per Newcrest share.

Newmont’s improved offer on these terms is best and final, subject only to no superior proposal emerging (and is referred to in this release as the best and final proposal).

The Newcrest Board of Directors has agreed to grant Newmont confirmatory due diligence access to enable Newmont to put forward a binding proposal.

Due diligence is expected to be completed within approximately four weeks.

Newcrest has indicated that it intends to grant exclusivity to Newmont during the due diligence period, with the terms of that exclusivity still to be agreed.

Newcrest will also undertake confirmatory due diligence on Newmont during this period.

“We are entering a new era in which mining companies must hold themselves to a higher standard of sustainability and long-term value creation. This transaction would strengthen our 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,” said Tom Palmer, President and CEO of Newmont.

“Together as the clear gold-mining leader, we would be well-positioned to generate strong, stable and lasting returns with best-in-class sustainability performance for decades to come.”

The proposed combination creates the industry’s best portfolio of world-class assets with the highest concentration of top-tier operations, primarily in favorable, low-risk mining jurisdictions. Newmont would further strengthen its portfolio by increasing annual copper production and adding nearly 50 billion pounds of copper reserves and resources to its balanced and diverse asset base.

By applying Newmont’s long track record of safe and profitable mining, the combined group is expected to deliver significant annual synergies and create long-term value for all stakeholders.

The business would be immediately supported by Newmont’s scalable, integrated operating model with a deep bench of subject matter experts and existing regional platforms in Australia and Canada.

This would allow the business to leverage the combined group’s global supply chain and generate substantial synergies through the implementation of Newmont’s proven full potential continuous improvement programme.

As demonstrated by the Goldcorp acquisition in 2019, Newmont delivered annual synergies of more than $1 billion, which continue to benefit the Company today and over the long term.

Over the last four years, these initiatives focused on optimising processing circuits, improving loading and haulage performance, reducing mill and equipment downtime and implementing new methods and technologies to increase mining rates across the portfolio.

Newmont would also apply its rigorous and industry-leading approach to asset management, identifying potential opportunities to optimise the combined portfolio and bring forward the most accretive projects as part of its strategy to maximise value for shareholders and other stakeholders.

The Best and Final Proposal 

Under the terms of the best and final proposal, Newcrest shareholders would own approximately 31 percent of the combined company. 

Newmont intends to apply for a foreign exempt listing on the Australian Securities Exchange (ASX) and establish Chess Depositary Interests on ASX in respect to Newmont shares issued to Newcrest shareholders under the Best and Final Proposal. The terms of the Best and Final Proposal represent a premium1 of:

·         35 per cent based on the closing price of Newcrest and Newmont shares on February 3, 2023, being the last trading day prior to the initial market release confirming Newmont’s proposal, and inclusive of the value of a special dividend of up to USD$1.10 per Newcrest share.

The best and final proposal is subject to customary conditions, including the parties entering into a Scheme Implementation Agreement (SIA) following satisfactory completion of due diligence and a unanimous recommendation from Newcrest’s Board of Directors that Newcrest shareholders vote in favour of the best and final proposal (in the absence of a superior proposal and subject to an independent expert concluding that the Best and Final Proposal is in the best interests of Newcrest’s shareholders).

If the best and final proposal conditions are satisfied (or waived) and the best and final proposal proceeds, implementation of the best and final proposal will be subject to conditions expected to include (among other things) approval by Newmont and Newcrest shareholders, relevant regulatory approvals, Australian court approval and other conditions customary for a transaction of this nature.

Newmont says it remains fully committed to acting in the best interests of its shareholders.

Newmont and its Board of Directors advise shareholders need not take any action at this time as there can be no certainty that any transaction will be concluded.

Newmont 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.

Premium analysis calculated by reference to the exchange ratio of 0.400x shares of Newmont for each Newcrest share held and a special dividend of up to USD$1.10 per Newcrest share.

·         Share prices based on NYSE and ASX trading of Newmont and Newcrest shares, respectively, as at close of February 3, 2023, of Newmont US$49.85/share and Newcrest A$22.45/share with AUD / USD of 0.692

·         As characterized in Newcrest’s press release on April 11, 2023, the 46.4 per cent premium reflects the increase in Newmont’s share price from February 3, 2023 to April 6, 2023, while holding the Newcrest share price constant at February 3, 2023.

This assumes a Newmont price of US$52.05/share with AUD / USD of 0.667

Benefits of the Proposed Transaction

·         Best portfolio of world-class assets: Combines high-quality operations, projects and reserves focused in low-risk jurisdictions, supporting multiple decades of profitable gold and copper production.

·         Ideal commodity mix with gold and copper exposure: Creates an enhanced portfolio with approximately 30 per cent of the combined reserves in copper, a critical metal for reducing carbon emissions and facilitating the ongoing transition to a new energy economy.

·         The gold sector’s recognized sustainability leader: Leverages Newmont’s leading position with a demonstrated commitment to leading environmental, social and governance practices.

·         Established position in Australia: Creates robust economies of scale, which facilitates access to top talent, leading technology and the opportunity to leverage global functional expertise and optimized cost structures.

·         District potential in highly-prospective Golden Triangle: Strengthens position in British Columbia, creating the opportunity to leverage regional infrastructure, global systems, diverse ore body experience and expertise in block cave mining.

·         Scalable operating model with a track record of delivering value: Leverages Newmont’s integrated operating model and proven Full Potential program, which has delivered annual benefits of over $1 billion following the Goldcorp acquisition.

·         Unparalleled financial strength: Supports a disciplined capital allocation strategy, maintaining the industry’s strongest balance sheet with flexibility throughout the commodity cycle to support portfolio reinvestment and deliver attractive shareholder returns.