Newcrest outlines return to Toronto
Australia’s biggest gold company will return to trading on North American markets, as the company looks to the Americas for its next phase of growth.
Australia’s biggest gold company will return to trading on North American markets, with Newcrest Mining returning its shares to the Toronto exchange as the company looks to the Americas for its next phase of growth amid a wave of gold-sector consolidation.
Newcrest boss Sandeep Biswas flagged a return to the Toronto exchange at the company’s annual financial results in August, saying a listing was “under active consideration”.
He said on Tuesday the decision flowed from Newcrest’s acquisition of a majority stake in the Red Chris mine last year, and as part of its plans to step up investments in exploration in Ecuador, along with the “growing interest” in Newcrest shares from North American fund managers.
The potential to tap the deep pool of funding available for gold majors in the US and Canada, as Newcrest considers its long-term life beyond its current assets, was also a consideration.
“Newcrest has got around 25 years of reserves, so if you take a 25-year view there will be opportunities that come up over time, there will be potential reasons to seek funding over time,” Mr Biswas said. “It gives us flexibility, but I can’t stress enough the long-term lens we’ve got.”
His comments came as Northern Star Resources and Saracen announced their $16bn merger, the biggest Australian gold deal since Newcrest took out Lihir Gold in 2010.
Mr Biswas said although Newcrest would take a cautious approach to corporate activity, he expected the pace of consolidation in the sector to pick up over the coming year.
“We’ll probably see more consolidation. But I think to do consolidation there have to be good reasons — synergies, or some sort of common basis where the whole is greater than the sum of the parts,” he said.
Newcrest left the Toronto stock exchange as the gold price crashed in 2013 after only 18 months of trading on the Canadian market, when the gold major booked massive losses, saying it did not believe the listing would deliver value.
But Mr Biswas said he now expected Newcrest to become a permanent fixture on the Canadian market, which he described as the world’s “premier” exchange for gold companies.
North American investors already own about 32 per cent of Newcrest stock and, while Mr Biswas said the company was not targeting specific holding levels for offshore investors, he expected that proportion to grow through the TSX listing.
“We don’t have a target as such, but clearly we’d like to see an uptick in that number particularly from shareholders who are not currently shareholders. This is geared towards people in North America who cannot hold ASX shares or who choose not to because of the time zone it trades in,” he said.
The company said it expected its shares to begin trading on the TSX by October 13.
Newcrest shares fell 15c on Tuesday to $30.98.
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