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"Global Mining Descisions in Your Palms"
DOWNLOAD THE MINING EXECUTIVE APP NOW
"Global Mining Descisions in Your Palms"
“This transaction also increases Newmont’s annual copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio. We intend to quickly realize these opportunities to create superior value for our shareholders, workforce, host communities and governments.”
President and CEO,
Newmont Corporation yesterday announced that following completion of due diligence it has entered into a binding Scheme Implementation Deed under which Newmont will acquire 100 percent of the issued share capital in Newcrest by way of an Australian court-approved Scheme of Arrangement.
“The combination of Newmont and Newcrest represents an exceptional value proposition for shareholders and other stakeholders. It creates 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, both part of our strategy to maximize value for shareholders and other stakeholders.”
Mr. Palmer continued: “This transaction also increases Newmont’s annual copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio7. We intend to quickly realize these opportunities to create superior value for our shareholders, workforce, host communities and governments.”
Newcrest’s Chairman, Peter Tomsett, added: “This transaction combines two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline. 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. The Newcrest Board is unanimously recommending the proposal. We are very proud of the entire Newcrest team for building a world class metals business, which will form a key part of the combined group. We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future.”
The New Sustainability Standard
For the last eight years, Newmont has been recognized as the top gold miner in the Dow Jones Sustainability Index, and regularly ranks as the most transparent company for sustainability disclosure in the S&P 500. Beyond Newcrest’s well-established sustainability credentials and top quartile industry ranking, Newmont will apply its proven sustainability practices and leadership to Newcrest’s assets by:
This acquisition would create a world-class portfolio of assets with the highest concentration of Tier 1 operations, primarily in favorable, low-risk mining jurisdictions. Supported by this portfolio, Newmont will be well-positioned to generate strong, stable and lasting returns with best-in-class sustainability performance, well into the future.
Through the combination of high-quality operations, projects and reserves, this portfolio is expected to deliver:
The combined business would be immediately supported by Newmont’s scalable, integrated operating model with a deep bench of experienced leaders, subject matter experts and existing regional teams in Australia and Canada. Building on the experience gained following the acquisition of Goldcorp, Newmont has identified the opportunity for substantial synergies:
Further value creation opportunities are anticipated as the Newcrest portfolio is fully integrated into Newmont, bringing together the industry’s best talent and processes across two key mining jurisdictions, including, among other things, the benefits from the experience of Newcrest’s world-class block caving team.
The Transaction brings together two of Australia’s largest gold producers and would reinforce Newmont’s long-standing commitment to safe, profitable and responsible gold and copper production in the country for decades to come. Newmont will leverage its existing regional operating model in Australia and, following the Transaction, will combine and optimize both companies’ leaders, subject matter experts, supply chains and regional infrastructure to drive best-in-class performance. Newmont intends to apply for a foreign exempt listing on the Australian Securities Exchange and establish Clearing House Electronic Sub-register System Depositary Interests on the ASX. Newcrest shareholders may elect to receive CDIs representing a unit of beneficial ownership in Newmont common stock based on their country of residence.
Papua New Guinea
Upon closing of the Transaction, Newmont will establish a regional presence and in-country offices in Papua New Guinea, committed to building and maintaining strong, proactive and mutually beneficial relationships with host governments and local communities while supporting safe and profitable operations.
Once complete, the Transaction will solidify Newmont’s position in Canada through the combination of operating mines and development projects, creating a Tier 1 district in British Columbia’s highly-prospective Golden Triangle.
The combination will also leverage Newmont’s existing regional operating model in North America to combine and optimize both company’s leaders, subject matter experts, supply chains and regional infrastructure to drive best-in-class performance.
Looking ahead, the Company’s expanded footprint in Canada, together with shared ore body experience and technical expertise, could unlock gold and copper opportunities from the combined organic project pipeline, including the key projects Galore Creek and Saddle North.
Newmont will maintain its current listing on the TSX following closing of the Transaction.
Driving Capital Allocation
Newmont remains committed to its capital allocation strategy, which starts with maintaining an investment grade balance sheet with strength and flexibility. The combined company’s balance sheet will be supported by an even stronger, lower cost, diversified portfolio focused in low-risk mining jurisdictions. With the sector’s largest reserve and resource base, the combined business will be in a very strong position to advance the most value-accretive development opportunities and sustainably improve overall shareholder returns.
The Transaction is highly accretive to Newmont shareholders which is further improved when anticipated synergies are fully realized within the first 24 months of closing. Additionally, Newmont intends to enhance cash flow by at least $2 billion in the first two years after closing through portfolio optimization.
Newmont will remain committed to maintaining its industry-leading dividend framework with a robust platform to drive leading returns throughout the price cycle:11
TRANSACTION SUMMARY AND CLOSE TIMELINE
Gregory Boyce will continue as Chair of Newmont’s Board of Directors (“Board”) and the Board will select two directors from Newcrest to join the Newmont Board. Tom Palmer will continue as President and Chief Executive Officer of Newmont and will lead the combined company with a focus on safely and responsibly leading the combined workforce, integrating the acquired assets and delivering on shareholder commitments.