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The Brucejack mine under construction in 2016
Brucejack mine under construction in 2016 © Pretium Resources

Newcrest Mining, Australia’s largest gold miner, announced on Tuesday that it would buy Canadian rival Pretium Resources in a deal worth around $ 2.8 billion.

The offer gives the Canadian miner a business value of around $ 3.5 billion ($ 2.8 billion), including debt and $ 202.5 million in cash.

Already one of the 10 largest gold miners in the world after production, Newcrest said Pretium shareholders would receive a consideration of C $ 18.50 per share for the rest of the company it does not already own.

It compares with the last traded price of C $ 15.10 on the Toronto Stock Exchange on Monday, up 0.3 percent and hovering around the 2021 high.

Pretium’s most important asset is the Brucejack business in the western Canadian province of British Columbia, about 140 km from Newcrest’s majority owned and operated Red Chris mine.

Newcrest described Brucejack as “one of the highest operating gold mines in the world” and said in a March 2020 technical report on the mine’s estimated gold production of 311,000 ounces per year at a total cost of $ 743 / ounce over an estimated 13 years of my life.

The Australian company produced 2.1 million ounces in the financial year ended June 30, at a total cost of $ 911 / ounce.

Newcrest already has a 4.8 percent stake in Pretium, but will require approval from two-thirds of the target’s shareholders, the British Columbia Supreme Court and other regulatory approvals to proceed.

“Brucejack is a Tier 1 mine in a Tier 1 jurisdiction and will deliver instant production, free cash flow and earnings diversification to Newcrest and will fit seamlessly into our longevity and low-cost portfolio,” said Sandeep Biswas, CEO of Newcrest. in a statement.

Newcrest shares fell 2.9 percent in morning trading in Sydney.

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