Newmont Corporation Will purchase Australia’s Largest Miner

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Newmont Corporation, the world’s largest gold mining company, has announced its intention to purchase Australia’s largest miner, the publicly listed company Newcrest Mining Limited. The proposed acquisition, valued at approximately US$17 billion, would see Newmont expand its significant presence in the Australian mining industry.

Newcrest Mining Limited, which operates in Australia, Papua New Guinea, and Ivory Coast, is one of the largest gold producers in the world, with a market capitalization of approximately AUD 17 billion ($12.5 billion). The company has been the subject of takeover speculation for some time, and the offer from Newmont is seen as a significant vote of confidence in the future of the gold mining industry.

This move follows a recent consolidation trend in the gold mining sector, with major players looking to increase their market share and boost their reserves. The industry has seen a surge in demand for gold in recent years, driven by low-interest rates, a weaker US dollar, and investor concerns about inflation.

Moreover, this decision would create a ripple effect in Canada as both companies have mining operations in the said country and are listed on the Toronto Stock Exchange

Suppose the deal is approved and successful. In that case, Newmont might strengthen its presence in British Columbia by purchasing Newcrest’s Brucejack gold mine, which is situated about 950 kilometres north of Vancouver, and Red Chris mine, which is situated around 1,700 kilometres north of Vancouver.

“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,” Tom Palmer, chief executive of Denver-based Newmont, mentioned in a press release.

The proposed acquisition is subject to regulatory approval and a vote by Newcrest shareholders. The industry is closely watching the outcome of this deal, as it could set the stage for further consolidation in the gold mining sector.

“Each Newcrest shareholder would receive 0.38 Newmont shares for each Newcrest share, the Australian miner said in a press release on Feb. 6 that confirmed Newcrest’s management is considering the offer,” said Financial Posts in the news.

“The company also said this was Newmont’s second offer that followed a bid of 0.363 Newmont shares for each Newcrest share, which Newcrest rejected.

“Newcrest shares were trading at around $20 per share when markets closed last week, little changed from a year earlier, while Newmont’s shares closed at around $67 in Toronto, down about 17 per cent from the same period in 2022.”

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