Pretium shareholders will have the option to receive $14.8 (C$18.50) per share in cash or 0.8084 Newcrest shares for each share held. This will be subject to proration.
However, a default consideration of $7.42 (C$9.25) per share in cash and 0.4042 Newcrest shares will be issued to Pretium shareholders who do not opt for cash or Newcrest shares.
Newcrest currently holds around 4.8% of shares in Pretivm, which owns the Brucejack operation in the highly prospective Golden Triangle region in Canada’s British Columbia.
Pretium president and CEO Jacques Perron said: “With this acquisition, Brucejack will join Newcrest’s portfolio of tier one assets, mitigating the inherent risks associated with ownership of a single-asset mining company.
“Moreover, Newcrest has the financial means and the intention of maximising the long-term potential of the Brucejack Mine and the district scale opportunities in the surrounding Brucejack property.”
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Pretium’s board has unanimously recommended its shareholders to vote in favour of the deal.
Newcrest managing director and CEO Sandeep Biswas said: “Brucejack is a Tier 1 mine in a Tier 1 jurisdiction and will deliver immediate production, free cash flow and earnings diversification to Newcrest and will fit seamlessly into our long-life, low-cost portfolio.
“Following this transaction, Newcrest will have exposure to six Tier 1 orebodies and a portfolio of organic growth options of unrivalled quality. The transaction will also drive a material increase in mineral resources, ore reserves and annual gold production.”
Biswas said that the combination of Newcrest and Pretium is expected to create the leading gold miner in the Golden Triangle.
The deal is planned to be completed in the first quarter of 2022.
It is subject to Pretium shareholders, in addition to the approval under the Investment Canada Act and other requirements.
The agreement also includes a $100.3m (C$125m) termination fee, which is payable by Pretium to Newcrest if the former favours a superior deal.