Australia’s largest listed goldminer has announced a $1.1 billion equity raising, in part to fund its $US460 million ($A703 million) further stake in a goldmine in southeast Ecuador.
Newcrest Mining’s capital raising consists of a $1 billion institutional placement at $27.54 a share, a seven per cent discount to Wednesday’s closing price, plus a $100 million share purchase plan.
Newcrest is buying the financing facilities in the Fruta del Norte mine from Orion Mine Finance Group and funds managed by Blackstone.
The mine is owned by Canada’s Lundin Gold, which Newcrest holds a 31.9 per cent stake in, and buying the gold prepay and stream facilities and an offtake agreement gives Newcrest further exposure to gold produced from the Tier 1 mine.
Newcrest managing director and chief executive Sandeep Biswas said the acquisition would give the company exposure to about 400,000 ounces of gold from the mine through 2026.
“With gold prices at the levels we see today, Newcrest expects to receive significant cash flows which will rank ahead of Lundin Gold’s equity owners,” he said.
The funds will also be used to fund future growth options including possible expansions of its mines in Canada and Western Australia.
Newcrest said during the March quarter it produced 519,000 ounces of gold at an all-in sustaining cost (AISC) of $827 per ounce, in line with guidance, and did not experience any interuption from the COVID-19 pandemic.
It has secured 55,000 COVID-19 rapid detection kits, which it will use in its return to site screenings, and had commenced trials of a COVID-19 Bluetooth tracing system called “Safety Trace” to identify close contacts of infected individuals.
Newcrest said it had also discovered a new high grade zone of mineralisation at its Red Chris mine in British Columbia, Canada.
Newcrest shares are in a trading halt.