Mining boss Ellison tells investors: ‘I hate what I’ve done’
The executive has been pressured to explain why the company made historical payments to offshore entities he controlled.
Newcrest Mining Ltd.’s board is prepared to recommend a takeover offer from Newmont Corp. to its shareholders, interim chief executive officer Sherry Duhe said.
Newmont made a non-binding offer to buy Newcrest last month in a deal that valued the Newcrest at A$29.4 billion ($19.5 billion). If successful, the deal would create by far the world’s biggest gold miner, with sites in North and South America, Africa, Australia and Papua New Guinea.
Newcrest opened its books to Newmont but initially stopped short of recommending the deal. However, after conducting its own due diligence on Newmont, “the latest offer is one that the board would be prepared to recommend subject to successful due diligence during the period,” Duhe said Thursday at a conference in Sydney hosted by Macquarie Group.
The due diligence period on the offer ends May 11. Dealmaking activity in the mining sector has ramped up in recent months, after two years of rising commodity prices left many mining companies awash with cash but still short of future production.
The deal is key to Newmont’s efforts to extend its lead over other bullion mining rivals like Barrick Gold Corp. It would also increase Newmont’s exposure to copper, a key material in the clean energy transition, at a time when analysts are predicting major shortages of the wiring metal over the coming decade. Newcrest wants copper to make up more than 50% of revenue by the end of the decade, up from around a quarter now.
Newcrest reported flat gold production for the first three months of the year compared with the previous quarter, while copper output fell about 10%.
(By James Fernyhough)
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