Newcrest (ASX:NCM) shares rise following Pretivm takeover update

The Newcrest Mining Ltd (ASX: NCM) share price is edging higher today following an update from the company.

At the time of writing, the gold miner’s shares are swapping hands for $25.22 apiece, up 1.61%.

Newcrest expands gold mine portfolio

In today’s release, Newcrest advised it has received the final approval to acquire the remaining stake in Canadian metals and mining company, Pretivm Resources.

The transaction received final approval under the Investment Canada Act, meaning that all regulatory approvals have now been obtained.

As a result, the Pretivm acquisition is expected to complete on or about 9 March 2022.

Currently, Newcrest currently holds a 4.8% stake in its Canadian counterpart.

Last month, Pretivm shareholders and option holders voted overwhelmingly in favour of the transaction. In total, 95.48% of the votes cast approved the special resolution.

Under the agreement, Pretium shareholders who elected to receive maximum cash consideration will receive approximately C$10.81 (A$11.79) in cash and 0.3357 Newcrest shares per Pretivm share.

For Pretivm shareholders who elected to receive the maximum share consideration, they will be allocated 0.8084 Newcrest shares per Pretivm share.

Pretivm shareholders who did not elect cash or Newcrest shares will receive the default consideration of 50% cash and 50% Newcrest shares. This will be C$9.25 (A$10.09) in cash and 0.4042 Newcrest shares per Pretivm share.

Quick take on Pretivm Resources

Pretivm is the owner of the Brucejack gold mine in British Columbia, Canada — one of the highest-grade operating gold mines in the world. It has an estimated gold production of 311koz (thousand ounces) per annum at an all-in sustaining cost (AISC) of $743 per ounce. The projected mine life is around 13 years.

Furthermore, Brucejack is conveniently located about 140 kilometres from Newcrest’s majority-owned and operated Red Chris mine. This allows the company to strengthen the region by having close access to critical infrastructure.

The combination of Newcrest and Pretivm will create the largest gold miner in the Tier 1 area of British Columbia.

Newcrest share price summary

Over the past 12 months, the Newcrest share price has been on a rollercoaster ride, posting a gain of around 2.7%. Year-to-date, its shares are up around 3.4% for investors.

The company holds the title of owning and operating some of Australia’s largest gold and copper mines. While the company appears solid on paper, its shares have not been immune to volatile market conditions.

Based on today’s price, Newcrest commands a market capitalisation of roughly $20.7 billion, with approximately 818 million shares outstanding.

The post Newcrest (ASX:NCM) shares rise following Pretivm takeover update appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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