In Newcrest Mining’s quarterly announcement, interim chief executive officer Sherry Duhe demonstrated the significance of getting the right price from Newmont.
“Following the rejection of Newmont’s two non-binding indicative proposals to acquire Newcrest during the quarter, a further non-binding indicative proposal was received in April, valuing Newcrest at over $29 billion and representing a 46 per cent premium to our share price prior to their initial proposal in February,” she said.
“The revised proposal highlights our outstanding portfolio of long-life gold and copper assets, our high-quality growth and exploration pipeline, and the achievements of our exceptional people.”
Newmont has received access to conduct exclusive due diligence of Newcrest before it tables a binding proposal.
Gold production dropped slightly for Newcrest in the March quarter, with 509,637 ounces (oz) produced across the three months. 512,130oz were produced in the December quarter of 2022.
Newcrest said improved performances at its Brucejack, Lihir and Fruta del Norte operations was offset by lower gold production at Cadia, Telfer and Red Chris.
“Higher gold production at Lihir was driven by increased mill throughput following improved rainfall during the quarter, as well as higher gold head grade,” Newcrest said in its quarterly.
“Gold production at Brucejack also increased compared to the prior period with operations returning to full capacity following the fatality in October 2022. Gold production at Cadia was mainly impacted by lower mill throughput compared to the prior period.”
Newcrest has maintained its production guidance of 2.1–2.4Moz for the 2022–23 financial year (FY23), with gold and copper production set to increase in the coming months. The company would need to produce at least 551,118oz of gold in the June quarter to meet its minimum FY23 guidance.
“Gold and copper production is expected to increase in the June 2023 quarter driven by higher mill throughput across all operations with a lower planned maintenance schedule,” Newcrest said.
“Gold head grade is also expected to increase at Lihir, Brucejack and Telfer. While Brucejack successfully resumed operations following the fatality in October, gold production is now expected to be ~300,000oz for FY23 driven by lower mill throughput and head grade.”
Newcrest’s all-in sustaining cost of $1012/oz was 7 per cent lower than the December quarter of 2022, driven by higher copper prices, lower production stripping expenditure at Telfer and Lihir and lower sustaining capital expenditure at Red Chris, Cadia and Brucejack.
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