Newcrest declined an option to buy more of WA’s Havieron gold project in a move that avoids a pivotal price discovery event on a logical future takeover target.
Australia’s biggest gold miner will snap a three-year streak of declining gold production and has surprised expectations by declining an option to buy more of Western Australia’sNewcrest Mining vowed to raise gold production by at least 8 per cent to between 2.1 million and 2.4 million ounces of gold in the year ahead after announcing a $US872 million full-year profit.
The agreement between Greatland and Newcrest gave the latter the right to buy an extra 5 per cent of the Havieron project last month at a price to be determined by an independent valuer. While Newcrest said the decision was based on price, it may also be an important tactical move designed to avoid a price discovery event for Greatland Gold, which many observers believe is a logical takeover target for Newcrest.
Newcrest’s decision not to take up the option to buy the extra 5 per cent effectively undermines the valuation boost Greatland received after the independent valuer put the implied $US1.2 billion price tag on the Havieron project. “At that time there was also a public announcement by the company that that was a one-off and that future raisings would be more along the lines of allowing existing shareholders to be part of the fundraising activity in relation to an equity raise,” he said.
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