Newcrest Mining Ltd. strengthened its hold on British Columbia's Golden Triangle region, as the miner continues its foray into North America through its purchase of Pretium Resources Inc. and its Brucejack gold mine.
Newcrest agreed to purchase all Pretium shares it does not own for C$18.50 in cash or 0.80847 of a Newcrest share for each Pretium share, in a deal with an equity value of about C$3.5 billion. The Australian miner held about 4.8% of Pretium prior to the deal's announcement.
In a Nov. 9 conference call on the deal, the Australian miner's CEO and managing director, Sandeep Biswas, said the Pretium acquisition will primarily be centered on integrating the Brucejack mine with its nearby Red Chris mine.
"We've outlined our growth at all our four operating assets and now we're adding Brucejack to our portfolio, and I think our focus on British Columbia will be really about the integration and plan that we will work with the Pretium team on how we'll optimize the assets with a [British Columbia] lens to it," Biswas said, noting the miner will appoint a dedicated North America-focused manager to oversee its operations.
On a financial standpoint, Newcrest CFO Gerard Bond noted the Pretium purchase is cash flow positive, which will aid in funding its previous commitments to progress its Red Chris operation in British Columbia, the Havieron joint venture in Western Australia, and the Lihir Phase 14A project in Papua New Guinea.
"The great feature of [the Pretium] acquisition is that it's accretive to cash flow from the get-go. This is an asset that's paying its way and basically complements our way to fund all [our growth] options," Bond said.
"We worked hard over many years to get Newcrest into a financial position where it can pursue profitable growth opportunities when they arise, and I'm pleased to say Newcrest is in an excellent financial position to fund this acquisition of Pretium Resources," the CFO added.
In addition to the financial upsides of the Pretium deal, the acquisition of Brucejack will enhance Newcrest's indicative gold production to well above 2 million ounces per year to its fiscal 2030, with all-in sustaining costs per ounce during the period expected to fall as development levels at Brucejack are completed.
Despite its latest acquisition, Newcrest's Biswas signaled the miner's plan to further other assets in its portfolio, including securing approval for its Wafi-Golpu mine in Papua New Guinea and the potential development of the Namosi copper project in Fiji, should prices for the red metal continue to remain elevated. "We got plenty to do. That's the importance of having a great portfolio of assets we can continue to develop and invest in, and our organic growth portfolio," Biswas said.
