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Newcrest agrees to acquire Pretium Resources

Published by
Global Mining Review,


Newcrest Mining Ltd has entered into an agreement (the arrangement agreement) to acquire all of the issued and outstanding common shares of Pretium Resources Inc. that it does not already own by way of a Canadian Plan of Arrangement (the transaction).

Highlights

  • Adds a Tier 1 large scale, long life, low cost mine to Newcrest’s portfolio of Tier 1 assets.
  • Immediately increases Newcrest’s gold production by >300 000 oz/y (~15%) to well above 2 million oz.
  • Accretive to Newcrest’s EBITDA and cash flow.
  • Provides immediate operational and financial diversification from a Tier 1 jurisdiction.
  • Growth in a region where Newcrest already operates and has strong existing relationships.
  • Significant near mine and district-scale exploration opportunity with exciting potential to realise resource and reserve growth.
  • Offer unanimously recommended by Pretium Resource’s Board of Directors.
  • Newcrest retains strong balance sheet to fund unrivalled global organic growth portfolio.

The Board of Directors of Pretivm have unanimously recommended that Pretivm shareholders vote in favour of the transaction and have entered into voting support agreements with respect to all of the Pretivm shares that they own or control.

Pretivm 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 Pretivm Technical Report of 9 March 2020 estimated gold production of 311 000 oz/y at an AISC of US$743/oz of gold over a projected 13 year mine life.

Brucejack and surrounding tenements are within the traditional territories asserted by the Tsetsaut Skii km Lax Ha (TSKLH) and Tahltan Nation, and in the Nass Area of Nisga’a Nation as defined in the Nisga’a Final Agreement. Brucejack is approximately 140 km from Newcrest’s majority-owned and operated Red Chris mine, located on Tahltan territory. Newcrest will become the operator and 100% owner of Brucejack following completion of the Transaction which is currently targeted for 1Q22.

Newcrest’s Managing Director and CEO, Sandeep Biswas, said: “We are delighted to be expanding our presence in this highly prospective region in British Columbia. 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. The transaction will also drive a material increase in mineral resources, ore reserves and annual gold production.”

“The combination of Newcrest and Pretivm will create the leading gold miner in British Columbia’s Golden Triangle, operating both the Brucejack and Red Chris mines. Both companies share similar philosophies with respect to safety, the environment, developing their people, engaging with local communities and investing for growth.

“The combination should provide enhanced career and growth opportunities for employees of both companies in Canada by being part of a larger, international gold and copper company with a focus on growth and on the Americas.

“Following due diligence, we believe that as the owner and operator of Brucejack, we can build on the strong foundations established by Pretivm and deliver significant additional shareholder value by leveraging our experience in operating epithermal gold mines and applying our exploration and innovation expertise to realise potential resource and reserve growth. Resource and reserve growth and our commitment to investing in the area will underpin the success and longevity of mining in the region for the benefit of the First Nations people, host communities, British Columbia and Canada,” added Biswas.

Pretivm’s President and CEO, Jacques Perron, commented: “The acquisition of Pretivm by Newcrest is an outstanding opportunity for Pretivm and its shareholders, employees, First Nations partners and the local communities in northwest British Columbia. The transaction delivers an immediate and compelling premium for Pretivm 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.”

“With this acquisition, Brucejack will join Newcrest’s portfolio of tier one assets, mitigating the inherent risks associated with ownership of a single-asset mining company. Moreover, Newcrest has the financial means and the intention of maximising the long-term potential of the Brucejack mine and the district scale opportunities in the surrounding Brucejack property. Newcrest and Pretivm have complementary corporate cultures and values, with a focus on safety, employee development and ESG. We believe our employees, First Nations partners and community partners will be very well-positioned to succeed and develop under Newcrest’s world-class stewardship,” concluded Perron.

In line with its vision of being the Miner of Choice, Newcrest is focused on safety, the environment, developing its people and fostering strong relationships with the communities near its operations. Newcrest deeply values the relationships it has developed to date with the Tahltan Central Government, Band Councils and the host communities of Iskut, Telegraph Creek and Dease Lake. Newcrest looks forward to developing similar relationships with the Nisga’a Nation, the Gitanyow Hereditary Chiefs, and the Tsetsaut Skii km Lax Nation and host communities in the Brucejack mine area.

Newcrest believes that its concurrent operation of both Red Chris and Brucejack mines will provide enhanced opportunities for both workforces, allow for aligned and optimal engagement with the First Nations and the broader community, and will provide the foundation of ongoing future investment in the region.

Read the article online at: https://www.globalminingreview.com/finance-business/09112021/newcrest-agrees-to-acquire-pretium-resources/

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