Newcrest Deal May Make Newmont a Global Gold Super
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Posted On: 02/14/2023 5:13:57 PM
Newcrest Deal May Make Newmont a Global Gold Superpower
A deal being negotiated between Newmont Mining, the top gold producer in the world, and top Australian miner Newcrest Mining could give birth to a global gold superpower if it is successful. Newmont Corporation confirmed early last week that it had submitted a $17 billion proposal to purchase 100% of Newcrest Mining’s issued share capital. If the takeover offer is successful, it would result in a merger between two of the largest gold miners in the world and set new standards for responsible and sustainable gold mining.
The takeover deal would be the largest such deal in Australian history and would create a global gold superpower unrivaled by any other gold producer across the world.
Although the offer is 4.7% higher than a previously rejected proposal, some analysts believe that Newmont will have to increase its bid for it to be successful.
Jackie Przybylowski, an analyst with BMO Capital Markets, stated that while news of the offer was a surprise, especially since Newmont had adopted a conservative approach to growth, it was a positive development. She explained that Newcrest’s existing assets would merge well with Newmont’s portfolio and that the larger size of the merged company is in line with recent comments from Newmont about pursuing size responsibly.
Furthermore, Przybylowski added in a note to investors that Newmont had shown some signs of a more aggressive approach as it pondered the benefits of size and how it could boost the firm’s relevance to investors. Newmont’s proposal would result in a merged enterprise, where Newcrest owns 30% of the firm while Newmont owns the remaining 70%.
Newmont President and CEO Tom Palmer stated that combining the two companies would create long-term value by joining “industry-leading portfolios of projects and assets.”
News of the proposal was received positively by Goldman Sachs, with the bank stating that integrating Newmont’s and Newcrest’s portfolios would allow Newcrest to quickly and substantially increase its output over the next few years. Goldman Sachs also added in a note to investors that the deal would grant Newmont a foothold in the copper industry in locations such as Canada and Australia.
With demand for copper slated to surge over the next decade due to its critical role in the development of renewables and electric auto firms, copper prices are poised to soar in coming years.
According to Jon Mills, an analyst at Morningstar, the acquisition offer from Newmont could spur other large gold producers to join the race to acquire Newcrest’s assets.
If this deal is inked, other industry players such as Eloro Resources Ltd. (TSX.V: ELO) (OTCQX: ELRRF) are unlikely to be affected since each has its own segment of the market that it serves.
NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX.V: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
A deal being negotiated between Newmont Mining, the top gold producer in the world, and top Australian miner Newcrest Mining could give birth to a global gold superpower if it is successful. Newmont Corporation confirmed early last week that it had submitted a $17 billion proposal to purchase 100% of Newcrest Mining’s issued share capital. If the takeover offer is successful, it would result in a merger between two of the largest gold miners in the world and set new standards for responsible and sustainable gold mining.
The takeover deal would be the largest such deal in Australian history and would create a global gold superpower unrivaled by any other gold producer across the world.
Although the offer is 4.7% higher than a previously rejected proposal, some analysts believe that Newmont will have to increase its bid for it to be successful.
Jackie Przybylowski, an analyst with BMO Capital Markets, stated that while news of the offer was a surprise, especially since Newmont had adopted a conservative approach to growth, it was a positive development. She explained that Newcrest’s existing assets would merge well with Newmont’s portfolio and that the larger size of the merged company is in line with recent comments from Newmont about pursuing size responsibly.
Furthermore, Przybylowski added in a note to investors that Newmont had shown some signs of a more aggressive approach as it pondered the benefits of size and how it could boost the firm’s relevance to investors. Newmont’s proposal would result in a merged enterprise, where Newcrest owns 30% of the firm while Newmont owns the remaining 70%.
Newmont President and CEO Tom Palmer stated that combining the two companies would create long-term value by joining “industry-leading portfolios of projects and assets.”
News of the proposal was received positively by Goldman Sachs, with the bank stating that integrating Newmont’s and Newcrest’s portfolios would allow Newcrest to quickly and substantially increase its output over the next few years. Goldman Sachs also added in a note to investors that the deal would grant Newmont a foothold in the copper industry in locations such as Canada and Australia.
With demand for copper slated to surge over the next decade due to its critical role in the development of renewables and electric auto firms, copper prices are poised to soar in coming years.
According to Jon Mills, an analyst at Morningstar, the acquisition offer from Newmont could spur other large gold producers to join the race to acquire Newcrest’s assets.
If this deal is inked, other industry players such as Eloro Resources Ltd. (TSX.V: ELO) (OTCQX: ELRRF) are unlikely to be affected since each has its own segment of the market that it serves.
NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX.V: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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