News Bulletin

Newcrest Proposes Combination with Lihir Gold

Sunday, 04 Apr 2010

Newcrest Mining Limited has announced and approached the Board of Lihir Gold Limited with a proposal to combine the two companies to create the world’s fourth largest gold company, with a portfolio of low cost, long life, high margin assets.

The proposal put to the Lihir Board was for a scrip and cash transaction at a fixed ratio of one Newcrest ordinary share for every 9.0 ordinary shares in Lihir plus A$0.225 cash per Lihir share, inclusive of any interim dividend declared by Lihir for the half year ending 30 June 2010, through a scheme of arrangement.

The deal represents a 35% premium to Newcrest and Lihir’s closing share prices on 12 February 2010, the last trading day prior to Newcrest’s approach in February.

The combination would result in Lihir shareholders owning approximately 35% of the combined organisation, and sharing in the benefits of the combination.

The combined organisation would create a standout portfolio of long-life, low-cost, tier-one gold assets. It would have an enviable selection of brownfield and larger greenfield growth options. Backed by a pro-forma market capitalisation of around A$24.5 billion and minimal net debt of A$200 million, the combined company would have a powerful platform to deliver superior financial performance and to capture and deliver future growth for shareholders.

The combined organisation would have 73.4 million ounces of gold reserves, 131.8 million ounces of gold resources and gold production of approximately 2.8 million ounces per annum ranking it the fifth largest gold producer in the world. With cash costs of US$348/oz the combined company would have costs in the industry’s lowest quartile.

Source: Newcrest Website April 2010

     

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