BY Richard Summerfield
Newcrest Mining Ltd has agreed to acquire all of the issued and outstanding common shares of Pretium Resources Inc. that it does not already own, in a deal worth $2.8bn.
Under the terms of the deal, Newcrest has offered Pretium’s shareholders the right to receive C$18.50 in cash or 0.8084 of a Newcrest share for each Pretium share held. The cash offer represents a 22.5 percent premium to Pretium’s last close on Monday.
The deal is subject to the approval of Pretium shareholders, as well as approval under the Investment Canada Act and other standard requirements. The companies said they expect the deal to close in the first quarter of 2022.
The agreement between the companies includes a C$125m break fee that Pretium would be required to pay Newcrest if it breaks away in favour of another deal.
Pretium is the owner of the Brucejack operation in the highly prospective Golden Triangle region of British Columbia, Canada. Brucejack began commercial production in July 2017 and is one of the highest-grade operating gold mines in the world. The Pretium Technical Report of 9 March 2020 estimated gold production of 311,000oz/y at an AISC of US$743/oz of gold over a projected 13-year mine life.
“We are delighted to be expanding our presence in this highly prospective region in British Columbia,” said Sandeep Biswas, managing director and chief executive of Newcrest. “Brucejack is a Tier 1 mine in a Tier 1 jurisdiction and will deliver immediate production, free cash flow and earnings diversification to Newcrest and will fit seamlessly into our long life, low cost portfolio.
“Following this transaction Newcrest will have exposure to six Tier 1 orebodies and a portfolio of organic growth options of unrivalled quality,” he continued. “The transaction will also drive a material increase in mineral resources, ore reserves and annual gold production.”
“The acquisition of Pretium by Newcrest is an outstanding opportunity for Pretium and its shareholders, employees, First Nations partners and the local communities in northwest British Columbia,” said Jacques Perron, president and chief executive of Pretium. “The transaction delivers an immediate and compelling premium for Pretium shareholders that reflects the excellent work of our employees and contractors in developing and operating the Brucejack gold mine, while also offering an opportunity to benefit from potential upside as Newcrest shareholders.”
News: Australia's Newcrest to buy Canadian gold miner Pretium in $2.8 billion deal