Newcrest Mining Ltd has entered into an agreement to acquire all the issued and outstanding common shares of Pretium Resources that it does not already own by way of a Canadian Plan of Arrangement.
The Pretivm Board of Directors has unanimously recommended that shareholders vote in favour of the transaction, which valued Pretivm equity at $2.8 billion, and have entered into voting support agreements with respect to all the Pretivm shares that they own or control. The transaction is targeted for completion in the March quarter.
Pretivm is the owner of the Brucejack operation in the 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, according to Newcrest. The Pretivm Technical Report of March 9, 2020 estimated gold production of 311,000 oz/y at an all-in sustaining cost of $743/oz of gold over a projected 13-year mine life.
Brucejack is some 140 km from Newcrest’s majority-owned and operated Red Chris mine, located on Tahltan territory.
Newcrest’s Managing Director and Chief Executive Officer, 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 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, according to Biswas.
“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.”
Pretivm’s President and Chief Executive Officer, Jacques Perron, said: “With this acquisition, Brucejack will join Newcrest’s portfolio of Tier 1 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 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, it added.