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Newcrest tightens grip on Brucejack gold mine


Newcrest Mining is one step closer to acquiring Canadian miner Pretium Resources after more than 95 per cent of Pretium shareholders voted in favour of the acquisition.

The acquisition will see Newcrest add the Tier 1 Brucejack gold mine in Canada to its portfolio, 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.

As part of the agreement, Pretium shareholders who elect to receive maximum cash consideration will receive approximately $C10.81 ($12) in cash and 0.3357 Newcrest shares per Pretium share.

Pretium shareholders interested in receiving maximum share consideration will receive 0.8084 Newcrest shares per Pretium share, while Pretium shareholders that neither elected cash or Newcrest shares will receive a 50/50 split of Newcrest cash and shares.

This equates to $C9.25 in cash and 0.4042 Newcrest shares per Pretium share.

The transaction still requires the tick of approval from the Toronto Stock Exchange, which should be known following a hearing by the Supreme Court of British Columbia on January 25. The deal will also need approval from the Investment Canada Act.

It is expected the transaction will be completed in the March quarter of 2022.

Newcrest managing director and chief executive officer Sandeep Biswas said the Brucejack mine is a natural addition to the company’s growing Canadian portfolio.

“This acquisition positions Newcrest as the leading gold miner in British Columbia’s Golden Triangle, operating both the Brucejack and Red Chris mines,” he said.

“This is an exciting time for Newcrest and we look forward to building on Pretium’s success to unlock further value in and around the Brucejack operation.”

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.

Newcrest was trading at $25.06 at the time of writing with a market capitalisation of $20.5 billion.

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