Friday 13th October 2023: At today's meeting, Newcrest (NCM) shareholders overwhelmingly voted in favour of a $26.2bn "merger" with US gold mining giant Newmont (the world's largest gold miner).

Newcrest-shareholders-vote-in-favour-of-Scheme.PDF

Some of the details:

• 84.74% of Newcrest shareholders present and voting (in person or by proxy) were in favour of the Scheme Resolution; and
• 92.63% of the votes cast by Newcrest shareholders were in favour of the Scheme Resolution.

Next steps

Newcrest will apply to the Federal Court of Australia (Court) for approval of the Scheme at a hearing scheduled for 10.15am (Melbourne time) on 17 October 2023.

If the Court approves the Scheme at the Second Court Hearing, a copy of the Court orders will be lodged with ASIC, following which the Scheme will become effective.

Special Dividend

Newcrest announced on 5 October 2023 a Special Dividend of US$1.10 per Newcrest share, subject to the Scheme becoming effective. This dividend will be fully franked.

Newcrest shares on the ASX and PNGX will trade ex the Special Dividend from commencement of trading on 18 October 2023. Newcrest shares on the TSX will trade ex the Special Dividend from commencement of trading on 19 October 2023.

The record date for the dividend will be 7.00pm (Melbourne time), 19 October 2023 and it will be paid on 27 October 2023.

Scheme Consideration

Subject to the Scheme becoming effective, eligible Newcrest shareholders will be entitled to receive the Scheme Consideration of 0.400 Newmont securities for each Newcrest share held on the Scheme Record Date, being 7.00pm (Melbourne time) on 30 October 2023. Newcrest shareholders on the:

• Australian share register will receive Newmont CHESS depositary interests (Newmont CDIs);
• PNG share register will receive Newmont PETS depositary interests (Newmont PDIs); and
• Canadian share register will receive Newmont shares (Newmont Shares).

Click on the link above to read the full announcement.

Disclosure: I like gold, but I do not hold Newcrest or Newmont shares.

Offer of $28 in Newmont shares. Following recent media speculation, Newcrest Mining Limited confirms that on 5 February 2023 it received a conditional and non-binding indicative proposal from Newmont Corporation (Indicative Proposal). Under the Indicative Proposal, Newcrest shareholders would be entitled to receive 0.380 Newmont shares for each Newcrest share held1.

The Indicative Proposal follows the prior receipt of an indicative, non-binding and conditional proposal from Newmont to acquire Newcrest at an exchange ratio of 0.363 Newmont shares for each Newcrest share. The Newcrest Board had considered that the earlier proposal from Newmont would not deliver sufficiently compelling value to Newcrest shareholders and on that basis, rejected the earlier proposal.

The Indicative Proposal is subject to a number of conditions, including granting of exclusivity to Newmont, due diligence, Newmont shareholder approval and various regulatory approvals, including FIRB and approval under the Hart-Scott-Rodino Act. The Indicative Proposal also contemplates the establishment of a Chess Depositary Interest listing on the ASX for new Newmont shares issued to Newcrest shareholders.

The Indicative Proposal implies a current offer price of $27.16 per Newcrest share based on the last closing price of Newmont shares and the AUD:USD FX rate as of 3 February 2023. The Indicative Proposal represents a 21% premium to Newcrest’s closing price of $22.45 per share on 3 February 2023 and a 27% premium to Newcrest’s 30-day VWAP of $22.22 per share, at an implied offer price of $28.32 per Newcrest share based on Newmont’s 30-day VWAP for the period ended on 3 February 2023.ewmont) to acquire 100% of the issued shares of Newcrest by way of a scheme of arrangement

Goldman Sachs report

Target of $35 based on 50:50 NAV/EBITDA blend

EBITDA +4% vs GS estimated 

Dividend US40 cps well above 22.5 estimate 41% payout

FCF 15% above GS estimated 

FY22 guidance 1800-2000 Koz Au a 860-1067/oz AISC

Looking at earlier straws the main objections still hold vs other miners but definitely appear to be improved numbers.

Disc: Held in RL super

23-7-2020:  Newcrest Quarterly Report - June 2020

Also:  Newcrest Quarterly Exploration Report - June 2020

Newcrest (NCM) is Australia's largest ASX-listed pure-play gold miner, but I don't hold NCM shares.  They've underperformed NST, EVN & SAR (the 2nd, 3rd and 4th largest) for good reason.  The others have better management, and better gold mines.  The exception is Newcrest's Cadia mine, 25km from the town of Orange in NSW, which is a brilliant gold mine.  Unfortunately, NCM are pulled down by Lihir (in PNG) and especially Telfer (in a remote area of northern WA), which is one of the worst gold mines in Australia, with some of the worst working conditions. 

What MAY cause NCM to perform better over the next couple of years is their growth pipeline, mostly new projects rather than extending their existing mines.  However, all things considered, I am happy to continue to stay on the sidelines with NCM and hold the others.  The others have provided superior total shareholder returns (TSRs) in recent years and I believe that there are good reasons to think they will continue to do so.