Newcrest Mining has bolstered its global portfolio with the addition of the Tier 1 Brucejack gold mine in Canada, after the miner executed an agreement to acquire Pretium Resources.
The transaction will see Newcrest obtain all Pretium shares and increases the company’s annual gold production by 15 per cent.
Located in the highly prospective Golden Triangle region of British Columbia, Brucejack is considered one of the highest-grade operating gold mines in the world.
The mine commenced commercial production in July 2017 and at March 9, 2020 boasted an estimated production capacity of approximately 311,000 ounces per annum at an all-in sustaining cost (ASIC) of $743 per ounce of gold over a projected 13-year mine life.
“We are delighted to be expanding our presence in this highly prospective region in British Columbia,” Newcrest managing director and chief executive officer Sandeep Biswas said.
“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 transaction will also drive a material increase in mineral resources, ore reserves and annual gold production.”
Brucejack is located approximately 140 kilometres from Newcrest’s majority-owned and operated Red Chris mine, which the company shares in a joint venture with Imperial Metals.
“The combination of Newcrest and Pretium will create the leading gold miner in British Columbia’s Golden Triangle, operating both the Brucejack and Red Chris mines. Both companies share similar philosophies with respect to safety, the environment, developing their people, engaging with local communities and investing for growth,” Biswas said.
Pretium president and chief executive officer Jacques Perron said the transaction is a representation of his company’s hard work to elevate Brucejack to a Tier 1 operation.
“The acquisition of Pretium by Newcrest is an outstanding opportunity for Pretium and its shareholders, employees, First Nations partners and the local communities in northwest British Columbia,” he said.
“The transaction delivers an immediate and compelling premium for Pretium shareholders that reflects the excellent work of our employees and contractors in developing and operating the Brucejack gold mine, while also offering an opportunity to benefit from potential upside as Newcrest shareholders.”
The Pretium board has unanimously recommended that Pretium shareholders vote in favour of the transaction.
The company will require approval from at least 66.66 per cent of Pretium shareholders, the Supreme Court of British Columbia as well as other regulatory constituents for the transaction to be permitted.
Pretium shareholders will be able to elect to receive either $C18.50 ($20.50) in cash or 0.81 Newcrest shares per Pretium share as part of the deal, subject to an aggregate cap of 50 per cent cash and 50 per cent Newcrest shares.