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Released May 18, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Already touted as the world's largest gold mining firm, Newmont Corporation (NYSE:NEM) (Greenwood Village, Colorado) is set to become even larger with its planned acquisition of Newcrest Mining Limited (Melbourne, Australia).
In a deal valued at more than $19 billion, the companies announced on Sunday a definitive agreement for Newmont to acquire Newcrest. The acquisition includes Newcrest's operations in Australia, Papua New Guinea (PNG) and Canada. Newmont already has operations in North and South America, Australia and Africa. The combined companies would include 10 Tier 1 gold mining assets, according to Newmont.
Barrick Gold Corporation (NYSE:GOLD) (Toronto, Canada) defines a Tier 1 operation as one with a potential to deliver a minimum 10-year life, annual production of at least 500,000 ounces of gold, and total cash costs per ounce over the mine life that are in the lower half of the industry cost curve.
The combined portfolio includes about 8 million ounces of total combined annual gold production.
The acquisition also more than doubles Newmont's exposure to copper, Newmont Chief Executive Officer Tom Palmer said in a conference call with industry analysts on Monday. It's combined annual copper production will be approximately 350 million pounds, all from Australia and Canada, with more than 90 billion pounds in reserves, he continued, "providing very significant exposure to this metal of critical importance to our world."
Palmer said the acquisition creates an opportunity to achieve $500 million in cost synergies within 24 months of the closure of the transaction. As an example, at Newcrest's Cadia mine in New South Wales, Australia, there is the potential to "enhance the performance of the current equipment in the mill to push to, and possibly behind, its nameplate capacity."
Completion of an expansion at the Cadia underground gold-copper mine is planned for third-quarter 2023. The project will expand the facility's capacity to 33 million tons per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.
Newmont also is targeting at least $2 billion of near-term cash flows resulting from the Newcrest acquisition in the first two years after closing the deal through portfolio optimization.
The acquisition may result in a reassessment of Newmont's future project spending priorities. Currently, Newmont has two big projects in the execution stage for the next two years, Palmer noted, namely the sinking of a mine shaft at its Tanami underground gold mine operations in Australia, and a new mine at its Ahafo North operations in Ghana. Subscribers can click here for the Tanami project report and click here for the Ahafo project report.
But other large projects still are in the study stages, Palmer noted, such as the Yanacocha Sulfide Gold-Sulfide Mine Life Extension in Peru. Newmont is "looking at everything from a full (...) approval toward the end of next year to making decision to put Yanacocha fully into closure, and a number of scenarios in between. If we were, for instance, to delay Yanacocha Sulfides for a period of time, that would take several hundred million dollars (of spending) out of next year and the year after."
Subscribers can click here for the Yanacocha life extension project report.
Palmer continued: "How many mega or major projects across different continents can you take on at any one time and make sure you've got the appropriate oversite and governance to manage those projects?"
He said, "One really big mega project in the multi billion dollars and a major project up to around a billion dollars, it is still what you really want to be thinking about managing at any one time. There might be a tail from one to the other but certainly at the peak of the spend you want to be spreading that out, so you got project execution risks managed but also that draw on cash managed. That will still be a filter that we'll apply as we do our portfolio optimization in the coming weeks and months."
Industrial Info is tracking 32 Newmont projects with an estimated value of $11.18 billion and 25 Newcrest projects with an estimated value of $4.33 billion. Subscribers can click here for a list of detailed Newmont project reports and click here for the list of Newcrest project reports.
Subscribers can click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
In a deal valued at more than $19 billion, the companies announced on Sunday a definitive agreement for Newmont to acquire Newcrest. The acquisition includes Newcrest's operations in Australia, Papua New Guinea (PNG) and Canada. Newmont already has operations in North and South America, Australia and Africa. The combined companies would include 10 Tier 1 gold mining assets, according to Newmont.
Barrick Gold Corporation (NYSE:GOLD) (Toronto, Canada) defines a Tier 1 operation as one with a potential to deliver a minimum 10-year life, annual production of at least 500,000 ounces of gold, and total cash costs per ounce over the mine life that are in the lower half of the industry cost curve.
The combined portfolio includes about 8 million ounces of total combined annual gold production.
The acquisition also more than doubles Newmont's exposure to copper, Newmont Chief Executive Officer Tom Palmer said in a conference call with industry analysts on Monday. It's combined annual copper production will be approximately 350 million pounds, all from Australia and Canada, with more than 90 billion pounds in reserves, he continued, "providing very significant exposure to this metal of critical importance to our world."
Palmer said the acquisition creates an opportunity to achieve $500 million in cost synergies within 24 months of the closure of the transaction. As an example, at Newcrest's Cadia mine in New South Wales, Australia, there is the potential to "enhance the performance of the current equipment in the mill to push to, and possibly behind, its nameplate capacity."
Completion of an expansion at the Cadia underground gold-copper mine is planned for third-quarter 2023. The project will expand the facility's capacity to 33 million tons per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.
Newmont also is targeting at least $2 billion of near-term cash flows resulting from the Newcrest acquisition in the first two years after closing the deal through portfolio optimization.
The acquisition may result in a reassessment of Newmont's future project spending priorities. Currently, Newmont has two big projects in the execution stage for the next two years, Palmer noted, namely the sinking of a mine shaft at its Tanami underground gold mine operations in Australia, and a new mine at its Ahafo North operations in Ghana. Subscribers can click here for the Tanami project report and click here for the Ahafo project report.
But other large projects still are in the study stages, Palmer noted, such as the Yanacocha Sulfide Gold-Sulfide Mine Life Extension in Peru. Newmont is "looking at everything from a full (...) approval toward the end of next year to making decision to put Yanacocha fully into closure, and a number of scenarios in between. If we were, for instance, to delay Yanacocha Sulfides for a period of time, that would take several hundred million dollars (of spending) out of next year and the year after."
Subscribers can click here for the Yanacocha life extension project report.
Palmer continued: "How many mega or major projects across different continents can you take on at any one time and make sure you've got the appropriate oversite and governance to manage those projects?"
He said, "One really big mega project in the multi billion dollars and a major project up to around a billion dollars, it is still what you really want to be thinking about managing at any one time. There might be a tail from one to the other but certainly at the peak of the spend you want to be spreading that out, so you got project execution risks managed but also that draw on cash managed. That will still be a filter that we'll apply as we do our portfolio optimization in the coming weeks and months."
Industrial Info is tracking 32 Newmont projects with an estimated value of $11.18 billion and 25 Newcrest projects with an estimated value of $4.33 billion. Subscribers can click here for a list of detailed Newmont project reports and click here for the list of Newcrest project reports.
Subscribers can click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
