PERTH (miningweekly.com) – Gold miner Newcrest Mining has rejected the takeover offer from gold major Newmont Corporation, saying the offer did not represent sufficient value for Newcrest shareholders.

Newmont last week offered Newcrest shareholders 0.38 Newmont shares for every Newcrest share held, which would result in the combined company being 30% owned by Newcrest and 70% owned by Newmont.

Newmont said in a statement that the offer represented a compelling opportunity for the shareholders of both companies to share in the upside of putting together two complementary businesses.

Newcrest told shareholders on Thursday that in order to determine if Newmont could provide an improved offer, which "appropriately reflects the value of Newcrest", the board was prepared to provide Newmont with access to limited, non-public information on a non-exclusive basis. The provision of this information is subject to certain conditions including signing of an appropriate non-disclosure agreement.

Meanwhile, Newcrest on Thursday reported a solid first-half performance, with statutory profit and underlying profits reaching $293-million, up from the $298-million reported in the previous corresponding period.

Group gold production for the six months to December reached over 1.03-million ounces, a 25% increase on the 832 298 oz produced in the previous corresponding period, with copper production also up 32% in the same period to 67 023 t.

Revenue in the half-year was up 24%, from $1.7-billion to $2.1-billion, while earnings before interest, taxes, depreciation and amortisation were up by 24%, from $740-million to $919-million.

All-in sustaining costs (AISC) for the period were down 8% on the previous corresponding period, from $1 190/oz to $1 089/oz.

The period under review included the addition of the Brucejack mine, in British Columbia, higher gold and copper sales volumes at Cadia and the favourable impact on costs from the weakening of the Australian dollar and Canadian dollar against the US dollar.

These benefits were largely offset by higher costs driven by increased activity, lower realised gold and copper prices, a decrease in Newcrest’s share of profits from its associates, and an increase in finance costs with a higher level of debt in the current period. Operating costs were also impacted by inflationary pressures which were in line with expectations,” the miner said.

“Newcrest had a solid first half operationally, producing 25% more gold and 32% more copper compared to the same period last year and delivering a healthy AISC margin of $585/oz, as we remain focused on disciplined financial management across our global portfolio. We expect production to improve further in the second half of 2023 and remain on track to meet our group guidance for 2023,” said interim CEO Sherry Duhe.

“We made significant progress on the execution of our growth strategy during the first half. We were very pleased to progress the Cadia PC1-2 and Lihir Phase 14A studies to execution, as well as complete the two-stage plant expansion at Cadia and further extend the mine life at Telfer.

“Our global gold and copper portfolio is well placed for the future, with our transformation programme delivering excellent progress at Brucejack, activities underway to maximise the value of our Red Chris and Havieron projects, and ongoing exploration success highlighting the potential for significant resource growth across our key target areas.

“We have also made progress on our sustainability agenda during the period, partnering with local communities as we strive to make a positive, sustainable difference through the Newcrest Sustainability Fund and drive key initiatives to support our Group Net Zero Emissions Roadmap.”

Looking ahead at the full 2023, Newcrest has set group gold production targets of between 2.1-million and 2.4-million ounces, with copper targets of between 135 000 t and 155 000 t, at an AISC of between $2.1-billion and $2.4-billion.

Gold production at Lihir and Brucejack is expected to increase in the second half of 2023 driven by higher mill throughput across both sites. Newcrest previously noted that following the unplanned mill downtime events and water restrictions experienced at Lihir and the Brucejack fatality in October 2022, both operations were anticipated to deliver at the lower end of their production guidance ranges for 2023.